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for the purpose of realizing funds for current governmental expenditures”).
As we pointed out in Barrow, even though tax certificates
are contracts between the issuing locality and the certificate
holder, State ex rel. Seville Holding Co. v. Draughon, supra at
354, their sale does not create a contractual relationship of
indebtedness between the issuer and purchaser. The sale of the
tax certificate at auction is an assignment to the purchaser by
the issuer of the landowner’s indebtedness to the issuer. The
State or local government incurs no obligation to pay any amount
to the holder of the tax certificate. In effect, the sale of tax
certificates substitutes the holder for the State or local
government as creditor of the landowner debtor. At most, the tax
collector
might be called on to act in the capacity of a
collection agent for the certificate holder, by taking
funds from a landowner who wishes to clear title to his
land by paying the taxes, penalties and interest,
together with the interest due to the holder of the tax
certificate, and transferring those funds to the holder
of the tax certificate. * * * [Barrow v.
Commissioner, supra.]
In light of the analysis in Barrow and current Florida law,
as we apply them to the evidence in the record in this case, we
hold that a Florida tax certificate is not an obligation of the
State of Florida or of any political subdivision thereof for
purposes of section 103. Accordingly, section 103(a) does not
exclude from gross income any interest realized at redemption of
such certificates.
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