(1) The question of whether an "earnest money receipt" constitutes a contract to sell real property depends upon the nature of each particular writing.The inquiry should be directed to whether the owner of the real property has effectively bound himself by that instrument to convey the property to the prospective purchaser.(2) If an earnest money receipt amounts to such a contract, a transfer of an interest in real property subsequent to the effective date of the Real Estate Sales Tax in compliance with an agreement entered prior thereto would be exempt from such tax.(3) Where an earnest money agreement entered subsequent to the effective date of the tax constituted a contract to convey an interest in real property, the Real Estate Sales Tax would be due as a result of the entry into such agreement, a contract to convey being a taxable "sale" as defined in the ordinance.
AGO 1951 NO. 90 > Jul 23 1951