Documentary Stamp Tax is applicable to car deals where the dealer is in Florida, or the lender or the customer is in Florida.
Documentary Stamp Tax is levied on promissory notes and written obligations to pay money executed or delivered in the state of Florida. It is due at the time of signing. In plain English: if any party (including the lender) in your car deal is located in Florida, they must pay this fee.
Documentary Tax in Florida is charged at $0.35 per $100 increments, or portion thereof. You can calculate Florida Documentary Stamp Tax by dividing the Principal Loan Amount (including any prepaid fees) by 100, rounding up to the nearest hundred, and multiplying by $0.35, capped at $2,450.
We calculate a preliminary Documentary Stamp Tax based on the Amount Financed before doing the same calculation again. The reason for this is largely due to the language of the law. Florida Tax Code says:
Documentary stamp tax is levied on promissory notes and written obligations to pay money, which are executed or delivered in Florida.
Read the entire guide to selling a Motor Vehicle in Florida. (Section 13 describes the Documentary Stamp Tax in more detail.)
We interpret this to mean that, since the Stamp Tax is being included in the Promissory Note, it forms a part of the note. This means that we calculate Stamp Tax on the entire Amount Financed, including the Stamp Tax. This might seem odd, but many lenders prefer to be conservative with these calculations to avoid risk of customers underpaying the duty.