TAXATION OF REAL PROPERTY INHERITED BY NON-INDIAN ‑- OMITTED PROPERTY -- INDIANS

TAXATION OF REAL PROPERTY INHERITED BY NON-INDIAN ‑- OMITTED PROPERTY --INDIANS

Land inherited by a non-Indian husband from his Indian wife is taxable from her death and prior to the issuance of a fee patent, and if omitted from assessment list, may now be assessed and taxed.

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                                                               November 20, 1957

Honorable Ray E. Munson
Prosecuting Attorney of Yakima County
Suite 102 County Court House
Yakima, Washington                                                                                                              Cite as:  AGO 57-58 No. 134

Attention:  Richard C. Focht, Deputy

Dear Sir:

            In your letter of October 31, 1957, previously acknowledged, you ask the following questions:

            Is land inherited by a non-Indian husband from his Indian wife taxable from her death and prior to issuance of a fee patent, and if omitted from the assessment list, may it now be assessed and taxed?

                                                                     ANALYSIS

            We answer both questions in the affirmative.

            Property held by an Indian under a trust patent may not be taxed by the state, but it has been held that such property inherited by a non-Indian is freed of all restrictions.  Levindale Lead Co. v. Coleman, 241 U.S. 432; Unkle v. Wills, 281 Fed. 29, 35; Chouteau v. Commissioner of Internal Revenue, 38 F. (2d) 976, 979;Johnson v. U.S., 64 F. (2d) 674, 676.

             [[Orig. Op. Page 2]]

            The examiner of inheritance, Bureau of Indian Affairs, in Portland, Oregon, issued a memorandum on this subject to the United States Indian agencies in the Portland area on the 6th day of October, 1955.

            In this bulletin the examiner referred to the two cases first cited above and said:

            "It is firmly established that property acquired by inheritance or devise by a non-Indian is unrestricted in the hands of the non-Indian or devisee.

            "This is true irrespective of whether a fee patent is issued by the Department of the Interior to the non-Indian heir or devisee because such patent is regarded as mere evidence of ownership.  When the non-Indian takes the property, it passes from a restricted status to an unrestricted status in the hands of the nonIndian immediately at the time of the death of the Indian from which the non-Indian took the property.  This is by operation of law.

            "The property so taken by the non-Indian becomes taxable from the time of death of the Indian."

            We believe the opinion of the examiner of inheritance to be correct.

            In our opinion of January 25, 1928, to the Honorable W. L. LaFollette, prosecuting attorney of Whitman County (OAG 27-28 p. 491 [[1927-28 OAG 491]]), a copy of which is enclosed, we held that property not assessed could be listed on the current tax roll as omitted property without limitation as to lapse of time.

            The three year limitation contained in RCW 84.40.080, in our opinion, applies only to the assessment of improvements not valued and assessed as a part of the real estate.  See our opinion of April 15, 1954, to the prosecuting attorney of Clallam County (AGO 53-55 No. 239), a copy of which is enclosed.

            You are therefore advised that the real estate, if heretofore omitted from the assessment list, may now be taxed as omitted property from the date of the death of the Indian spouse.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

E. P. DONNELLY
Assistant Attorney General