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AGO 1955 No. 84 - May 27, 1955
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Don Eastvold | 1953-1956 | Attorney General of Washington

EXCISE TAX ON REAL ESTATE SALES ‑- APPLICATION TO MINERAL RIGHTS IN PRIVATE LAND

The sale of mineral rights in private property is a sale of real estate and the County Treasurer must collect the excise tax on the sale under the provisions of RCW 28.45.010, as amended.

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                                                                   May 27, 1955

Honorable John Panesko
Prosecuting Attorney
Lewis County Courthouse
Chehalis, Washington                                                                                                                Cite as:  AGO 55-57 No. 84

Dear Sir:

            You have requested our opinion on the following question:

            Shall the county treasurer collect a tax under the provisions of RCW 28.45.010, as amended, upon an instrument conveying mineral rights in certain private property?  Is the sale of mineral rights in private property the sale of real estate?

            We assume from your question that the conveyance is of mineral rights in private property.  We conclude that the sale of mineral rights in private property is a sale of real estate, and the county treasurer must collect the tax under the provisions of RCW 28.45.010, as amended.

                                                                     ANALYSIS

            RCW 28.45.050 authorizes the county commissioners of any county to levy an excise tax on the sale of real estate.  The term "sale" is defined by RCW 28.45.010 as having its ordinary meaning and including any

            "* * * transfer of the ownership of or title to  [[Orig. Op. Page 2]] real property, * * * or any estate or interest therein for a valuable consideration * * *."

            The question is whether a transfer of sale of mineral rights in private land is a transfer of real property.

            "Mineral right" is defined as:

            "An interest in minerals in land.  A right to take minerals * * *."  Black's Law Dictionary, 4th Edition, and "The right or title to all, or to certain specified, minerals in a given tract."  Webster's New International Dictionary, 2nd Edition.

            There can be an ownership of minerals in place in private land, or an unlimited right to take all minerals or certain specified minerals from land, which constitutes a definite and separate estate in land apart from the estate in the surface of the land itself.

            In 1 Thompson on Real Property (Perm. Ed.) 106, § 88, it is said that:

            "* * * the rule is now well established that mines are land, that minerals in their natural location in the earth are a part of the land, * * *  So minerals in place, * * * until separated from the soil, are part of the realty in which they lie and the sale or conveyance thereof is a sale or a conveyance of an interest in real estate.  * * *"

            At p. 108 of the same work, § 89 says:

            "Minerals unsevered from the soil form a separate corporeal hereditament, and constitute property capable of possession distinct from the surface.  * * *"

             [[Orig. Op. Page 3]]

            § 90 at p. 113, states that:

            "* * * Whether a conveyance creates a fee in minerals under the surface or an incorporeal hereditament is to be determined by the intention of the parties as disclosed by the instrument read in the light of surrounding circumstances rather than from the instrument alone.  * * *"

            In § 98, at p. 128, the following formula is suggested:

            "It would seem that the proper solution of the question turns on the language of the instrument employed, the guiding principle of construction being that, if the words used import an exclusive right to take all the minerals or all the minerals of a certain kind in certain described land, it is a conveyance of such minerals as corporeal real property in place, * * *"

            See also Burby on Real Property, Hornbook series, Section 58:  36 Am.Jur., Mines and Minerals, Section 36, page 307.

            A distinction must be kept in mind between mineral rights in private lands and a claim for location of mining claims under, in or upon public lands.  This problem was analyzed in the opinion of the attorney general No. 51-53-408 dated September 24, 1952, [[to Norman A. Ericson, Prosecuting Attorney, Pend Oreille County]]a copy of which was heretofore forwarded to you. dated September 24, 1952, a copy of which was heretofore forwarded to you.

            For discussion of a related problem, see McCoy v. Lowrie, 42 Wn. (2d) 24, 253 P. (2d) 415.

             [[Orig. Op. Page 4]]

            From the foregoing analysis we conclude that a transfer of mineral rights in private land is a transfer of real property and is subject to the real estate excise tax on a sale or transfer thereof within the provisions of the law relating to an excise tax on real estate sales.

Very truly yours,

DON EASTVOLD
Attorney General

W. DELMORE MCDOWELL
Assistant Attorney General

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