TAXATION ‑- PERSONAL PROPERTY TAXES ‑- LIABILITY FOR ‑- VENDOR OR PURCHASER

TAXATION ‑- PERSONAL PROPERTY TAXES ‑- LIABILITY FOR ‑- VENDOR OR PURCHASER.

Where personal property is sold during the year in which an assessment for taxes is made, and there is no agreement between the parties as to the payment of taxes, there is no authority for prorating such personal property taxes between the vendor and purchaser, but a purchaser who has been required to pay said taxes may have a right of recovery therefore against the vendor.

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                                                                   May 21, 1951

Honorable Edward G. Cross
Prosecuting Attorney
Adams County
Ritzville, Washington                                                                                         Cite as:  AGO 51-53 No. 44

Dear Sir:

            We have your letter of April 19, 1951, requesting our opinion on the following question:

            Where personal property is sold during the year in which the assessment is made, and there is no agreement between the vendor and purchaser for payment of the property taxes levied upon said property later in that year and due the following year, are such taxes to be prorated between the vendor and purchaser?

            Our conclusion may be summarized as follows:

            There is no statutory provision or court decision providing for the prorating of personal property taxes between the vendor and purchaser of personal property sold during the year in which the same is assessed, but a purchaser who has been required to pay the taxes on the item purchased, in order to save it from sale for taxes, may have the right to recover the same against his vendor.

             [[Orig. Op. Page 2]]

                                                                     ANALYSIS

            You have set forth a situation wherein the owner of an item of personal property sold the same on January 2, 1951.  The assessment for 1952 personal property taxes was made and listed on the county assessor's rolls against the vendor, as the owner of the property at noon of January 1, 1951.  Your questions are:  (1) Who is liable for these 1952 taxes?  (2) If the vendor is liable, does he have relief in the form of being able to prorate the taxes with the purchaser for the portion of the assessment year each owns the article in the manner in which real property taxes may be prorated?

            Section 1, chapter 139, Laws of 1939 (Rem. Rev. Stat. 11112) provides that all personal property shall be listed and assessed "with reference to its value and ownership on the first day of January in the year in which it is assessed."  By section 1, chapter 122, Laws of 1937 (Rem. Rev. Stat. 11112-1), noon of that day is the exact time for determining ownership.  Thus, the owner of taxable personal property on January 1, 1951, will be assessed for property taxes to be levied subsequently that year and to be due in 1952, known as the 1952 taxes.  Section 2, chapter 136, Laws of 1939 (Rem. Rev. Stat. 11112-2).

            Section 11265, Rem. Supp. 1943, provides two sources of payment of personal property taxes.  Palace Fish & Oyster Co. v. Bean, 32 Wn. (2d) 56, 200 P. (2d) 753, summarizes the statute as follows:

            "Rem. Supp. 1943, § 11265 (P.P.C. § 979-493), provides that the tax assessed on each item of personal property shall be a lien upon such personal property from and after the date on which the same is listed with and valued by the county assessor.  We have repeatedly held that the county may follow the property on which the tax is 'assessed' (using the statutory language) wherever it may be found within this state, and that no distraint is necessary to perfect the lien.  Personal property taxes may also be made a lien on other personal property of the person liable for the taxes, but in such a case distraint is necessary to perfect the lien."

            There is no statutory provision or court decision of which we are aware providing for the prorating of personal property taxes between a vendor and purchaser of property.  We doubt if there is any basis for such a procedure.  Rather, we believe, the attempt should be made to determine the primary  [[Orig. Op. Page 3]] responsibility for the personal property tax: Is the item assessed or the person assessed primarily liable.  Perhaps, then, there may exist a right of recovery between the parties for taxes one has been required to pay.

            Should the assessor first go against the item of property assessed or against the person assessed, by charging his other property?  There is no statutory direction.  InWilberg v. Yakima County, 132 Wash. 219, 231 Pac. 931, the Supreme Court attempted to set forth a rough order of procedure.  The court there said that personal property taxes were a "personal obligation" of the person who owned the item at the time of assessment (now the January 1 owner, by statute), that the tax should be collected from the item assessed if it remained in the hands of the person assessed, that the tax should be collected from other real and personal property of the person assessed "if that specific property does not exist in such hands," and that if the tax be not collected from the person assessed, then "it may be collected from a subsequent owner in whose hands the property may be at the time of the attempted collection."  Thus the court indicated primary responsibility is on the person assessed.  However, we have always held that this did not force the treasurer to follow one course in preference to or in priority over another.

            While statutes for the collection of personal property taxes have been amended since theWilberg decision, the changes have only been to incorporate most of that decision's contents into the amendatory enactments.  Noticeably absent are the provisions directing the order of procedure in making collection.

            We mention the order of procedure as an indication of the relative responsibility between the person assessed and the new owner.  It is certainly arguable that in the Wilberg case the Supreme Court has indicate that a new owner of the item assessed, who has been required to pay the tax, would have a recovery against the person assessed because it directed the assessor to proceed first against the person assessed.  We do not attempt to decide that question because you have not presented it directly, if, indeed, it is capable of being decided at the present time without a court action.  We also should mention the possibility that a warranty of title by the vendor to his purchaser may be pertinent in the determination of a right to exoneration.

Very truly yours,

SMITH TROY
Attorney General

C. JOHN NEWLANDS
Assistant Attorney General