§12.36 - Administration and Procedure

• Jurisdiction: Washington

§12.36 ADMINISTRATION AND PROCEDURE

The real estate excise tax is administered by the Department of Revenue. The general administrative procedures in Chapter 82.32 RCW apply to the administration of the real estate excise tax except as provided in RCW 82.45.150. The county and city taxes are administrated and collected with the state tax.

(1) Tax rate

The tax rate imposed by the state is 1.28 percent of the selling price. RCW 82.45.060. Counties and cities are authorized to impose additional taxes as set forth in Chapter 82.46 RCW. Except for the one percent purchaser tax that may be imposed at the county level on all sales in the county under RCW 82.46.070, the governing body of the county generally establishes the rate for the unincorporated areas of the county and the governing body of the city establishes the rate for the city.

(2) Payment of tax for sales other than controlling interests transfers

The payment of the real estate excise tax is the seller's obligation, except for the county-level one percent tax, which, if imposed by the county under RCW 82.46.070, is the purchaser's obligation. RCW 82.45.080; RCW 82.46.050; RCW 82.46.070. Effective May 1, 2010, the parent corporation of a wholly owned subsidiary is deemed to be the "seller" for real estate excise tax purposes when the subsidiary is the seller to a third party and the subsidiary is dissolved before payment of tax. RCW 82.45.080(2); WAC 458-61A-301(1)(b). If the tax is not received by the due date, the transferee is personally liable for the tax, along with any delinquent interest that may accrue, unless (i) an instrument evidencing the sale is recorded in the official real property records of the county in which the property conveyed is located or (ii) either the transferor or transferee notifies the Department of Revenue in writing of the occurrence of the sale within 30 days after the date of sale. RCW 82.45.100.

With respect to the transfer of controlling interests in entities owning Washington real property, the liability of the buyer for the real estate excise tax is discussed in WAC 458-61A-101. Although RCW 82.45.100 provides for buyer liability if an instrument evidencing the sale is not recorded or the Department of Revenue is not notified, the WAC does not discuss the buyer's liability for payment of the real estate excise tax for sales of real property other than controlling interests in entities owning real property. This may be due to the fact that in most sales of real property, other than transfers of controlling interests, an instrument evidencing the sale will be recorded.

The tax is paid to the treasurer of the county where the real property is located. RCW 82.45.090; RCW 82.46.060; WAC 458-61A-301. No conveyance document, lease, or assignment of lease will be accepted by the county auditor for filing or recording until the tax is paid and a stamp is affixed to the document by the county treasurer. RCW 82.45.090; RCW 82.46.060; WAC 458-61A-301.

(3) Due date for payment of tax

The tax is due on the date of sale, regardless whether the contract of sale or instrument of conveyance is recorded at that time. RCW 82.45.100. The date of sale provision in WAC 458-61A-102(5) states as follows:

(5) "Date of sale" means the date (normally shown on the instrument of conveyance or sale) that ownership of or title to real property, or control of the controlling interest in an entity that has a beneficial interest in real property, is delivered to the buyer/transferee in exchange for valuable consideration. In the case of a lease with option to purchase, the date of sale is the date when the purchase option is exercised and the property is transferred. "Date of sale," "date of transfer," "conveyance date," and "transaction date" all have the same...