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AGO 1959 No. 90 - December 21, 1959
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John J. O'Connell | 1957-1968 | Attorney General of Washington

TAXATION - USE FUEL - ENFORCEMENT OF LIEN.

The state of Washington may enforce its use fuel tax lien against a motor vehicle owned by a Canadian corporation whenever and wherever it may be found in Washington even though the present owner was a bona fide purchaser for value of the vehicle and had no notice of the lien.

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                                                               December 21, 1959

Honorable Louise S. Taylor
Director of Licenses
General Administration Building
Olympia, Washington                                                                                    Cite as:  AGO 59-60 No. 90

Dear Mrs. Taylor:

            By letter previously acknowledged you requested the advice of this office on the following question:

            May the lien impressed upon a motor vehicle (RCW 82.40.100) for payment of Washington use fuel taxes incurred (RCW 82.40.020) by a Canadian corporation be enforced against the vehicle after it has become the property of a second Canadian corporation, such vehicle having been at all times registered in Canada?

            We answer your question in the affirmative.

                                                                     ANALYSIS

            Perhaps the question may be more succinctly stated in terms of survivorship, viz.:  Does the lien against a vehicle owned by a nonresident and registered in a foreign jurisdiction survive a transfer of ownership in that jurisdiction so that such lien may be enforced in Washington against the vehicle in the hands of the transferee?

            The pertinent statute under which this lien is impressed, § 11, chapter 127, Laws of 1941 (cf. RCW 82.40.100) reads as follows:

             [[Orig. Op. Page 2]]

            "The tax, including any penalty and interest hereby imposed, shall constitute a lien upon, and shall have the effect of an execution duly levied against, any motor vehicle in connection with which the taxable use is made, attaching at the time of such use.  Such lien shall not be removed until such tax has been paid or the motor vehicle subject to such lien has been sold in payment of such tax, and shall be paramount to all private liens or encumbrances of whatever character upon such motor vehicle and to the rights of any conditional vendor or any other holder of the legal title in or to such motor vehicle."  (Underscoring supplied)

            That particular portion of this statute underscored above clearly and without equivocation defines the time at which the lien for use fuel taxes (imposed by RCW 82.40.020) attaches to a vehicle in connection with which the taxable use is made; viz., "at the time of such use."  So, also does the statute define the duration of such lien and the conditions upon which the lien will be discharged; viz., "Such lien shall not be removed until such tax has been paid or the motor vehicle subject to such lien has been sold in payment of the tax."

            In 84 C.J.S., Taxation, § 593, the following statement is made:

            "The general rule is that, where property subject to a lien for taxes is transferred, the property remains subject to the lien, although in the hands of a purchaser for value without notice. . . ."

            More particularly, and with reference to personal property (e.g., a motor vehicle), we find this appropriate statement in § 593c of the referenced text:

            "In the absence of a statute to the contrary, a transfer of personal property does not divest a tax lien which has attached to it, even though the buyer purchases for value without notice, and although the tax lien includes taxes on property other than the property sold."  (Underscoring supplied.)

            To the same general effect see: 51 Am.Jur., Taxation, §§ 1013 through 1015; Cooley, Taxation, Vol. 3, §§ 1238, 1239.

             [[Orig. Op. Page 3]]

            Research has failed to reveal any particular decision of our supreme court wherein it has been called upon to interpret the statute here in question (RCW 82.40.100) or any other comparable statute imposing a lien for the payment of excise taxes.  However, with respect to liens for the payment of personal property taxes (see: RCW 84.60.030) our court has said in Wilberg v. Yakima County, 132 Wash. 219, 231 Pac. 931, 41 A.L.R. 184 (1925) that:

            "If the tax is not collected from the person against whom it is assessed and who owned the personal property at that time, it may be collected from a subsequent owner in whose hands the property may be at the time of the attempted collection, but in order to collect the tax from such person it must originally have been so specifically assessed that it can be traced into the hands of persons against whom the tax is sought to be enforced and there identified as being the same specific property described in the original assessment. . . ."

            Likewise it is said inPalace Fish & Oyster Co. v. Bean, 32 Wn. (2d) 56, 58, 200 P. (2d) 753 (1948):

            ". . . We have repeatedly held that the county may follow the property on which the tax [personal property 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."

            See, also:  In re Carroll Construction Co., 41 Wn. (2d) 317, 249 P. (2d) 234 (1952), vacated (on the issue of lien priority) 76 S.Ct. 22, 346 U.S. 802, 98 L.ed. 333 (1953).

            InTerritory of Alaska v. The Arctic Maid, 140 F. Supp. 190, 200 (1956) it was recently held that a lien claimed against a freezer ship for the payment of business license taxes incurred by the former owner of the vessel could be enforced against the vessel while in the hands of the succeeding owner, a bona fide purchaser for value and without notice of such lien.  As authority supporting this conclusion the court, at page 200, cited 84 C.J.S., Taxation, § 644, and the annotation which follows Wilberg v. Yakima County, supra, at 41 A.L.R. 188, 189.

            Consistent with the decisions of our supreme court in the case of personal property tax liens and the majority rule with reference to tax liens in  [[Orig. Op. Page 4]] general, it is concluded that the state of Washington may enforce its use fuel tax lien against the motor vehicle in question whenever and wherever it may be found in Washington and that such lien may be enforced notwithstanding the fact that the present owner was a bona fide purchaser of the vehicle, for value and without notice of the lien.  We attach no special significance to the fact that the transferee and the transferor of the vehicle involved are Canadian corporations and the vehicle was at all times registered in Canada.  In our opinion the result would be the same if the successive owners were residents of any sister state and registered a similar vehicle there.

            We hope the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

ROBERT J. HALL
Assistant Attorney General

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