[WSBARP] Excise tax and penalties for decedent - grant county

[Eric Nelsen]

I recall something similar in King County a couple years ago, where a transaction was held up because the estate of the first spouse to die was never probated, and DOR refused to acknowledge that they had no basis to collect excise tax on the prior transfer. If I remember right, DOR insisted that excise tax is due unless an exemption is cited, and with no transfer on record with an exemption from first spouse to survivor, they can collect tax on that off-the-record transfer. Aside from that one instance, I haven't heard anything about it since.

Seems like no good argument to me--it puts DOR in the position of verifying propriety of the transfer itself, whereas their role is supposed to be examining the transfer documents and collecting tax or permitting an exemption on that specific transfer. If your deed is "PR-of-H to Buyer,"  then I don't see why DOR should be permitted to require excise tax on this transfer for a completely different, "W-to-H" transfer that occurred off the record in 2009. If they don't like it, they should audit the prior transfer or start an action under RCW 82.45.080<http://apps.leg.wa.gov/RCW/default.aspx?cite=82.45&full=true#82.45.080>, not hold up the current conveyance.

That's as I read RCW 82.45<http://apps.leg.wa.gov/RCW/default.aspx?cite=82.45&full=true>, anyway. Clearly DOR has a different opinion. Given the amounts typically at stake, it may take a class action to get it figured out.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Friday, November 21, 2014 11:32 AM
To: wsbar; wsbar trust
Subject: [WSBARP] Excise tax and penalties for decedent - grant county

H&W owned real property.  W died in 2009.  H died 2014.  Son is PR.  Pr has an P&S for a new buyer. PR is happy to pay the normal excise tax on this sale.

Title company is allowing sale of W’s interest based on our affidavit to clear title, so no probate needed for W.

Grant County indicates that we have to pay additional excise tax and penalties and interest from 2009 til now on the transfer from W to H... and they base that on a sale price = 1/2 of the assessed value.

there was no sale back in 2009.  If we did a probate of W’s estate, they would have to file a PR deed without any excise tax.  It isn’t enough of an excise tax to justify doing a probate.

any other counties doing this?

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734
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