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

Sat Apr 3 13:58:00 PDT 2021

In quiet title actions after I have my judgment quieting tile and there is a change of ownership I have had success in sending the quiet title judgment to the assessor with the tax parcel number involved and ask them to change the taxpayer on their records and I haven’t had a kickback yet from them

Bryce H. Dille
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of John J. Sullivan
Sent: Saturday, April 3, 2021 1:45 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Background of Need for Real Estate Excise Tax Affidavit

I have a quiet title judgment regarding a parcel in the Torrens System in King County. I haven’t recorded the judgment. Why would I do that since the judgment is already a public record?

I’ve gotten an order in the Torrens case, which I will present to the Registrar when I apply for the replacement certificate and withdrawal from Torrens.

Then I will record a deed conveying it from the estates of the two owners to the family LLC. At that point I will include a REET.

But in the quiet title there isn’t a transfer per se. the judgment simply confirms the folks who have owned and run the property since the 1960’s are the owners even though everybody ignored the Torrens requirements.

John J. Sullivan

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On Apr 3, 2021, at 1:37 PM, Tom Westbrook <tjw at w3net.net<mailto:tjw at w3net.net>> wrote:

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

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto: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<mailto: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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