[WSBARP] Background of Need for Real Estate Excise Tax Affidavit

[Tom Westbrook]

Thanks for that great explanation, Dwight.



In other words, we should all stop whining. Where was the WSBA when all
this happened?



Sincerely,



Tom



Thomas J. Westbrook

Attorney at Law





Rodgers Kee Card & Strophy, P.S.

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Email: tjw at buddbaylaw.com

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www.buddbaylaw.com



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*From:* wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>
*On Behalf Of *Dwight Bickel
*Sent:* Friday, April 02, 2021 3:40 PM
*To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
*Subject:* Re: [WSBARP] Background of Need for Real Estate Excise Tax
Affidavit



The lawyers mostly did not perceive the extent of change when the Dept. of
Revenue expanded the affidavit requirement of WAC 458-61A-303. The
objection of Washington Land Title Ass’n was the only public comment.



The DOR position and interpretation is simple. There should be an excise
tax affidavit for every change of ownership of real property. Changes by
operation of law (like inheritance), changes due to court orders (like
partition, divorce, quiet title, probate) and changes due to transfers of
ownership (like mergers and distributions), which previously did not
require recording, usually were exempt from the real estate sales tax, now
require an excise tax affidavit.



Another Dept. of Revenue change was accomplished without objection by the
Bar when DOR changed RCW 82.45.197 to require excise tax to be paid if
there was not a specific WAC stating it was exempt. That change allowed the
Grant County Treasurer to charge that sales tax for property inherited
without a probate. Though a statute exempted inheritance, the WAC only
allowed an exemption with documentation from a probate. He testified at the
Legislature that every transfer of ownership due to death legally requires
a probate. I was there to disagree, but lost every public debate. He
collected from many heirs; often massive taxes due to the value of
agricultural land. A 2016 change sponsored by the Washington Land Title
Ass’n fixed that incorrect interpretation.



That is why we now have to have affidavits and $10 fees though such
transfers are not taxable sales, and we now have to record documents about
such changes of ownership.
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