[WSBARP] Low sale price - R.E. Excise Tax

[Bickel, Dwight]

The practical problem for your client is that the excise person will not allow the deed to be recorded. I recommend sending it for recording as others suggest to document that the sale amount is genuinely all that is being paid. However, I recommend being prepared to pay extra tax required by the excise person to allow the deed to be recorded, then file a petition for refund. I wish more people would petition for refund when the local excise person demands payment of tax that the state statutes does not require.

I recommend providing the proper affidavits signed by each, with a supplemental statement of the seller stating why he/she/it chose to “sell” for significantly less than apparent fair market value. The real estate sales tax only applies to the consideration that is actually received by the seller. There is no authority that the tax must be paid based upon the value of the land. Even if the conveyance is truly a gift (partial gift), there is no real estate sales tax due for a gift (other than value to seller of relief from debt.) The person sitting at the excise tax seat may know that is the law, but that person is likely to require tax to be paid based upon the value or you don’t get to record the deed.
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