[WSBARP] Leasehold Assignment Excise Tax Question

[Mark Anderson]

Dear All:
WAC 458-61A-106 (1)(b) provides that "The transfer of a lessee's interest in a leasehold for valuable consideration is taxable to the extent the transfer includes any improvement constructed on leased land.  If the selling price of an improvement is not separately stated, or cannot otherwise be reasonably determined, the assessed value of the improvement as entered on the assessment rolls of the county assessor will be used."  (Emphasis mine).
In my not so hypothetical, Lessor owned all of the real property and its improvements.  Lessor leased to Lessee a portion of the real property and a portion of the improvements on that portion of the real property.  Lessee did not construct any improvements on the leased land.  Ownership of the real property and ownership of the improvements were not conveyed to the Lessee.
Lessee wants to assign its leasehold rights in the real property and the improvements to a Third Party.  Because ownership of the improvements did not change hands, does WAC 458-61A-106 apply?
Even if WAC 458-61A-106 does apply, does the fact that Lessee and the Third-Party are both not-for-profit organizations provide any exemption or other relief from the payment of excise or use tax on the transaction?
Thanks.
Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock Street, Suite 209, PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
CONFIDENTIALITY NOTICE
This transmission is confidential and is intended solely for the use of the individual named recipient. It may be protected by the attorney-client privilege, work product doctrine, or other confidentiality protection. If you are not the intended recipient, or the person responsible to deliver it to the intended recipient, be advised that any dissemination, distribution, or copying of this communication is prohibited. If you have received this transmission in error, please immediately notify the sender via e-mail or by telephone at (253) 327-1750 that you have received the message in error, and then delete it. Thank you.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20260630/7fc1f80f/attachment.html>