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August 31, 1970
Honorable Bruce A. Wilson
Senator, Second District
P.O. Box 553
Omak, Washington 98841
Cite as: AGLO 1970 No. 115
Dear Senator Wilson:
You have requested our opinion on the application of the conveyance stamp tax to an assignment of a vendor's interest in a real estate contract. We paraphrase your question as follows:
Is an assignment, accompanied by a deed, of a vendor's interest in a real estate contract which contains a forfeiture clause, subject to the excise tax upon conveyances of real property imposed by RCW 82.20.010?
We answer this question in the affirmative, as follows:
The statute which governs your question, RCW 82.20.010, reads as follows:
"There is levied and there shall be collected a tax upon conveyances as follows: On any deed, instrument, or writing (unless deposited in escrow before May 1, 1935), whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser, or any other person by his direction, when the consideration or value of the interest or property conveyed, exclusive of the value of any lien or encumbrance remaining thereon at the time of sale, exceeds one hundred dollars and does not exceed five hundred dollars or fractional part thereof, fifty cents; and for each additional five hundred dollars or fractional part thereof, fifty cents. This section shall not apply to any instrument or writing, given to secure a debt, nor to any conveyance to the state."
[[Orig. Op. Page 2]] It is clear under decisions since Ashford v. Reese, 132 Wash. 649, 233 Pac. 29 (1925), that the vendee under a forfeitable real estate contract has certain rights in the land. See AGO 1968 No. 12 [[to Department of Water Resources on March 19, 1968]], copy enclosed, for a detailed discussion of many of these cases. As an illustration, the court held in Sigman v. Stevens-Norton, Inc., 70 Wn.2d 915, 425 P.2d 891 (1967), that the purchaser under an executory contract has an interest which he can mortgage but there is no lien on the fee under such a mortgage.
However, the existence of such rights or interests as this in the purchaser does not mean that the seller no longer has any legal interest in the realty which is subject to the contract. It is true that for certain purposes, a vendor's interest in a forfeitable real estate contract becomes intangible personal property ‑ the right to receive payments. This doctrine has been applied by our court in determining situs for purposes of distribution in decedents' estates and to find jurisdiction to impose inheritance taxes. See In Re Plasterer's Estate, 49 Wn.2d 339, 301 P.2d 539 (1956), discussed below. The fact remains however, that the vendor still retains the legal title to the subject real estate.
In Re Plasterer's Estate, supra, concerned the application of Washington's inheritance tax to the transfer on death to heirs of a domiciled decedent's interest as vendor in a forfietable contract for the sale of real estate located in Alaska. An inheritance tax was paid to Alaska measured by the decedent's interest in the realty there situated, and our court held that Washington could also impose a tax, reasoning as follows:
"Now what did the heirs inherit? They inherited three parcels of realty situated in Alaska, each subject to a contract of sale executed by the decedent while she was the owner. They were obligated, upon payment of the purchase price, to execute deeds to the purchasers. (This was done for them by the ancillary executrix.) By virtue of the forfeiture clauses, they were entitled, in the case of failure of the vendees to perform, [[Orig. Op. Page 3]] to terminate the contracts and to forfeit all rights of the vendees thereunder. The real property was not within