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<p class="MsoNormal"><span style="color:#1F497D">I do see how the distinction between “transfer tax” and our “real estate excise tax” (for which an affidavit is required on all transfers requiring either payment or proof of specific exemption) could be confusing.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">See: <a href="http://www.ncsl.org/research/fiscal-policy/real-estate-transfer-taxes.aspx#WA">
http://www.ncsl.org/research/fiscal-policy/real-estate-transfer-taxes.aspx#WA</a><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">which lists all states’ transfer taxes,
<i>including</i> our REET (albeit stating that it is an excise tax)<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">And see:
<a href="http://www.investopedia.com/terms/t/transfertax.asp">http://www.investopedia.com/terms/t/transfertax.asp</a>
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#1F497D">which states: “</span><span style="font-size:13.0pt;font-family:"Arial","sans-serif";color:#111111;background:white">Transfer tax is also known as "excise tax" in some states.”<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:13.0pt;font-family:"Arial","sans-serif";color:#111111;background:white"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">I’m not saying that “Investopedia” is legal precedent, but I do think there is room for debate here about what the buyer and seller intended, and those of us drafting (or reviewing) purchase agreements should
not assume “transfer tax” is a category of closing costs will be deemed completely inapplicable in Washington (especially if it is not distinguished from and given separate treatment than the REET).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="color:#1F497D">Inger C. Brockman</span></b><b><span style="color:#1F497D"> </span></b><b><span style="color:#215868">| Montgomery Purdue Blankinship & Austin
</span></b><b><span style="font-size:8.0pt;color:#215868">PLLC</span></b><b><span style="color:#215868"><o:p></o:p></span></b></p>
<p class="MsoNormal" style="mso-margin-bottom-alt:auto"><span style="font-size:8.0pt;font-family:"Arial","sans-serif";color:#1F497D">701 Fifth Avenue, Suite 5500, Seattle, WA 98104 (206) 682-7090 Fax: (206) 625-9534
</span><span style="font-size:8.0pt;font-family:"Arial","sans-serif";color:#215868"><a href="mailto:brockman@mpba.com"><span style="color:#215868">brockman@mpba.com</span></a>
<a href="http://www.mpba.com/" title="http://www.mpba.com/"><span style="color:#215868">www.mpba.com</span></a></span><span style="font-size:8.0pt;font-family:"Arial","sans-serif";color:#1F497D"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Bickel, Dwight<br>
<b>Sent:</b> Thursday, May 25, 2017 1:09 PM<br>
<b>To:</b> WSBA Real Property Listserv<br>
<b>Subject:</b> Re: [WSBARP] "Excise" versus "Transfer"<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">It might help people understand if you called it by the correct name; it is a real estate sales tax. There should be no reasonable debate that it is a transfer tax.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">If the buyer agrees in a real estate purchase and sale agreement to pay the real estate sales tax, the amount paid by the purchaser is additional consideration that must be added to the price that is also taxed.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Computing the extra tax on the increased taxable amount requires a bit of algebra [see, we really did need to learn it!]:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Initial Purchase Price / (1.00 – [local excise tax rate (.0228)]) = Adjusted Purchase Price subject to tax<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Thus, a $250,000 price in an area with that tax rate, divided by .9772, results in an adjusted price of $255,832.99.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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