COUNTY REAL ESTATE SALES TAX UNPATENTED MINING CLAIMS.
The sale of unpatented mining claims are not subject to the County Real Estate Sales tax. Such claims are personal rather than real property.
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September 24, 1952
Honorable Norman A. Ericson
Pend Oreille County
Newport, Washington Cite as: AGO 51-53 No. 408
You request our opinion upon whether
the county real estate sales tax applies to a sale of unpatented mining claims situated on federal lands.
unpatented mining claims are personal property, thus the real estate sales tax does not apply.
RCW 28.45.050 authorizes the county commissioners of any county to levy an excise tax upon the sales of real estate. The term "sale" is defined byRCW 28.45.010 as having its ordinary meaning and including any
"* * * transfer of the ownership of or title to real property, including standing timber, or any estate or interest therein for a valuable consideration, * * *"
The question is, therefore, whether an unpatented mining claim is an interest in real property.
[[Orig. Op. Page 2]]
Our Supreme Court has held such an interest to be personal property. SeeHuffman v. Ellen Mining Co., 118 Wash. 546, 204 Pac. 197 (1922), where the court, in reaffirming its decision in Phoenix Mining and Milling Co. v. Scott, 20 Wash. 48, 54 Pac. 777 (1898), stated at 118 Wash. 549:
"* * * In that case we held that the possessory right which a person acquired by the location of a mining claim, under the statutes of the United States is not such an interest as will support the lien of a general judgment within the meaning of our code making such a judgment a lien upon 'the real estate of the judgment debtor.' If this be the rule, it would seem necessarily to follow that the interest acquired ispersonal rather than real, and being personal, it could be sold under execution as personal property is so sold." (Emphasis supplied.)
This position has been again reaffirmed as recently asWoodworth v. Edwards, 3 Wn. (2d) 579, 587, 101 P. (2d) 591 (1940), in which it is stated that:
"While some courts have laid down a different rule, and have held that a possessory right under which a mining claim is held pursuant to notice of location is real property, and not personalty, many of these decisions are based upon statutes which require such a holding."
Further, at page 588:
"Questions involving the title and right of possession to unpatented mining claims have always been difficult of solution. Under Federal and state statutes, mining claims are unlike any other property. Many years ago, this court, by the two decisions first above cited, established a rule concerning mining claims, and we are of the opinion that these cases laid down a rule of property and should be followed. We accordingly hold that the sheriff, when he received the execution sued out by McVane upon his judgment against the corporation, properly levied upon the corporation'sinterest in the mining claims as personal property; * * *" (Emphasis supplied.)
[[Orig. Op. Page 3]]
See also American Smelting, etc., Co. v. Whatcom County, 13 Wn. (2d) 295, 124 P. (2d) 963 (1942). Note also the RCW 84.04.080 defines personal property for the purpose of ad valorem taxation as including all improvements upon lands, the fee of which is still vested in the United States.
We call your attention, however, to the fact that the fee is vested in the United States and the United States Supreme Court considers the unpatented mining claim to be an interest in real property. Wilbur v. Krushnic, 280 U.S. 306, 313 (1930); Ickes v. Development Corp., 295 U.S. 639, 644 (1935);Elder v. Wood, 208 U.S. 226 (1908); and Manuel v. Wulff, 152 U.S. 505, 510-511 (1894) although in at least one case,Bradford v. Morrison, 212 U.S. 389 (1909), the holding was based upon state statute, indicating that the state's determination of the nature of the interest is more than advisory. For a general annotative discussion of the problem see 52 A.L.R. 135-136 (1928); 36 Am.Jur. 356, § 107 (1941); and 58 C.J.S. 113, § 59 et seq., (1948).
Our court has several times treated such mining interests as being real property but without specific consideration of the question. SeeRayburn v. Stewart-Calvert Company, 105 Wash. 570, 178 Pac. 454 (1919) and 105 Wash. 575, 178 Pac. 455 (1919); Fisher v. Jackson, 120 Wash. 107, 206 Pac. 929 (1922); Karnes v. Flint, 153 Wash. 225, 279 Pac. 728 (1929); andOlympic Mang. M. Co. v. Downing, 156 Wash. 686, 287 Pac. 872 (1930); comparePriestley Mining & Milling Co. v. Lenox Mining & Devel. Co., 141 Wash. Dec. 90 (Aug. 21, 1952) [[41 Wn. 2d 101]]. See alsoLindley on Mines (3rd Ed. 1914) 1205, § 539, andMedley, Status of Mining Locations in Washington, 9 Wash. L. Rev. 209 (1934).
However, each time the specific issue has been before our Court, it has held such mining interests to be personal rather than real. Not only are we bound thereby, but nothing appearing to the contrary, we must conclude that the legislature, in taxing the sale of interests in real property, meant interests in land as had been previously defined by our Supreme Court.
We can therefore only conclude that the transfer of a mining claim in this state is the transfer of personal property and the county real estate sales tax does not apply.
Very truly yours,
JENNINGS P. FELIX
Assistant Attorney General