AGO 1953-55 No. 6.

Case Date:April 14, 1953
Washington Attorney General Opinions 1953. AGO 1953-55 No. 6. April 14, 1953[Orig. Op. Page 1]PRIVATEREAL ESTATE SALES TAX --- APPLICATION TO FEDERAL INSTRUMENTALITIES --- RECORDATION --- APPLICATION TO ASSIGNMENT OF VENDEE'S INTEREST --- SHERIFF'S SALE --- EXECUTION SALES --- FEDERAL INSTRUMENTALITIES, CONSTITUTIONAL EXEMPTIONS FROM REAL ESTATE SALES TAX.The real estate sales tax applies to the assignment of a vendee's interest at an execution sale. The tax becomes due upon the transaction becoming executed by expiration of the redemption period and issuance of the sheriff's deed.Honorable Joe L. JohnsonCowlitz County Prosecuting AttorneyCowlitz County Court HouseKelso, WashingtonCite as: AGO 1953-55 No. 6Dear Sir: You request our opinion whether the negotiated purchase of land by a federal instrumentality (the Reconstruction Finance Corporation) is exempt real estate sales tax. We conclude that it is not. ANALYSIS 1. Preface The Reconstruction Finance Corporation is an instrumentality of the United States, Boeing Aircraft Co. v. R. F. C., 25 Wn. (2d) 652, 171 P. (2d) 838 (1946), and thus it is exempt state taxation by virtue of the federal constitution, McCulloch v. Maryland, 4 Wheat. 316 (17 U.S. 1819). However, Congress may waive immunity. Maricopa County v. Valley National Bank, 318 U.S. 357 (1943). 2. Statutory Provisions The real-estate sales tax statute does not apply to sales by the United States or its instrumentalities ---RCW 28.45.010 excludes from the definition of taxable sale "a sale by the United States or this state," and RCW 28.45.020 excludes from the definition of "seller" "the United States or the state of Washington." Thus, when the United States is the vendor, the tax is not imposed upon the sale. Since RCW 28.45.080 imposes the tax on the seller, this follows the constitutional formula. [Orig. Op. Page 2] When the United States or its instrumentalities is the buyer, the tax applies unless the purchase is by "appropriation or decree in condemnation" RCW 28.45.010. This equitably means that when a sale is forced by government action, the seller is burdened with no tax. This exemption also avoids possible constitutional problems involved in computation of the condemnation award. 3. Constitution The tax is solely and specifically upon the seller, RCW 28.45.080---it is his legal obligation even though (1) the economic burden may, as is usual with all taxes, be passed to the buyer, and (2) even though the amount of the tax for security purposes is a...

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