COUNTIES REAL ESTATE SALES TAX, SALES PURSUANT TO EXECUTION ‑- MORTGAGE FORECLOSURE SALES ‑- JUDGMENT EXECUTION SALES ‑- SHERIFFS ‑- COURTS

COUNTIES REAL ESTATE SALES TAX, SALES PURSUANT TO EXECUTION ‑- MORTGAGE FORECLOSURE SALES ‑- JUDGMENT EXECUTION SALES ‑- SHERIFFS ‑- COURTS

The county real estate sales tax applies to execution sales pursuant to judgment or mortgage foreclosure and is imposed upon the one from whom title passes.

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                                                               September 4, 1952

Honorable John J. O'Connell
Pierce County Prosecuting Attorney
Tacoma, Washington                                                                                                              Cite as:  AGO 51-53 No. 399

Attention:  Robert A. Jacques

Dear Sir:

            You request our opinion on whether:

            (1) the county real estate sales tax applies on an execution sale pursuant to mortgage foreclosure, or on an execution sale of real property pursuant to judgment; and

            (2) upon whom is the tax imposed.

            We conclude:

            (1) the tax applies to such sales, and

            (2) the tax is imposed upon the one from whom title passes; i.e., the mortgagor or judgment debtor.

                                                                     ANALYSIS

            1. Application of the Tax:

             [[Orig. Op. Page 2]]

            RCW 28.45.010 and the Uniform County Ordinance enacted thereunder, which we are advised was enacted by Pierce County, provide:

            "* * * the term 'sale' shall have its ordinary meaning and shall include any conveyance, grant, assignment, quitclaim, or transfer of the ownership of or title to real property * * * or any estate or interest therein for a valuable consideration, * * *."

            Further, you inform us that Pierce County has enacted the following provision of the Uniform County Ordinance:

            "Any transfers or conveyances pursuant to any proceedings for the foreclosure of any mortgage, lien or other encumbrance, except a satisfaction thereon, whether executed by the sheriff by public sale or by anyone by public or private sale to satisfy a debt shall be subject to this tax."

            The judgment of a court is a "lien or other encumbrance" within the meaning of the above section.  Thus the sale on execution is specifically made subject to the tax.

            2. On Whom is the Tax Imposed?

            RCW 28.45.080 provides in part:

            "The tax levied under this chapter shall be the obligation of the seller * * *."

            The same is also provided in section 3 of the uniform ordinance.  RCW 28.45.020 defines "seller" as:

            "As used in this chapter and in any ordinance enacted pursuant thereto, the term 'seller,' unless otherwise indicated by the context, means any individual, receiver, assignee, trustee in bankruptcy, trust, estate, firm, copartnership, joint venture, club, company, joint stock company,  [[Orig. Op. Page 3]] business trust, municipal corporation quasi-municipal corporation, corporation, association, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, non-profit or otherwise; but it shall not include the United States or the state of Washington."

            This definition is, as it must be, carried into the Uniform County Ordinance, section 1.

            We conclude that the term "seller" is used in its ordinary sense to mean the one from whom title passes.  Imposition of the tax on the sheriff, or upon the court, would be such an unusual and unfair situation as well as being constitutionally questionable, so as to leave little doubt that such was not legislatively intended.  The court and sheriff are but the means by which a sale is accomplished.  They are not the "seller," the correlative of which is "buyer," as that term is normally used in law.  (See Uniform Sales Act, RCW 63.04.110)

            The tax becomes, pursuant to RCW 28.45.070, a lien on the property sold, and the county treasurer, at his option, may enforce the tax obligation through an action of debt against the seller, or he may proceed against the property itself (RCW 28.45.080).  Thus, if the tax is not collected, it becomes a lien on the property and the buyer will be required to pay in order to clear his title and then seek what recourse he may have against the seller as above defined.

            We suggest that the more equitable collection method would be for the tax to be computed at the time of the sale and the buyer be warned of the lien so that this amount could be taken into account in determining the purchase price of the property, as would be done in a normal private sale.

            We enclose for your perusal a copy of our opinion to the Prosecuting Attorney of Whatcom County dated March 10, 1952 [[Opinion No. 51-53-256]], relating to the time when the sales tax is due on a real estate mortgage foreclosure.

Very truly yours,

SMITH TROY
Attorney General

JENNINGS P. FELIX
Assistant Attorney General