Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1954 No. 258 -
Attorney General Don Eastvold


Conveyance tax levied by RCW 82.20.010 is levied upon the transaction, not upon either party, and payment is a matter of agreement between the parties.

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                                                                   May 14, 1954

Honorable Cliff Yelle
State Auditor
Legislative Building
Olympia, Washington                                                                                               Cite as:  AGO 53-55 No. 258

Attention:  Mr. A. E. Hankins, Chief Examiner

Dear Sir:

            The following is composed in response to your request, already acknowledged, for the opinion of this office upon a question arising from the conveyance of certain real property by the Port of Tacoma.  The Port as vendor required its vendees to pay the cost of the stamps which represent the conveyance tax levied by RCW 82.20.010.  Various of these vendees now claim refunds in the amount of the tax from the Port on the ground that the tax is the obligation of the vendor.

            You ask whose duty it is to pay the tax.

            In our opinion, the tax is levied upon the conveyance, rather than upon either party thereto, and payment is a matter of agreement between those parties, and the vendor is not bound to refund such tax when paid by the vendee.


            RCW 82.20.010 provides in relevant part that:

             [[Orig. Op. Page 2]]

            "There is levied and there shall be collected a tax upon conveyances as follows:  On any deed, instrument, or writing * * * 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, * * *" (Emphasis supplied)

            There is nothing in the statute which specifically lays the tax upon either party.  Perhaps the best method of illuminating the true effect of the statute will be to explore the possible sources of the misapprehension apparently harbored by the vendee‑claimants.

            The real estate sales tax levied by counties pursuant to RCW 28.45.010 1953 Supp., although inapplicable to the instant transactions by reason of the exclusions in that section, is expressly made the obligation of the seller.  Possibly the effect of that section has been erroneously imported into the situation at hand, an understandable mistake in view of the similarity in taxes.

            It may be that a portion of Rule 184 of the Tax Commission's Rules Relating to the Revenue Act (1949 revision) has contributed to the confusion.  At page 99 of the cited work we find the following:

            "Who shall affix stamps‑-The act requires that the person who makes, signs, or issues any instrument taxable thereunder shall affix and cancel the revenue stamps.  It also prohibits any person from accepting such instruments unless they are properly stamped."

            The Tax Commission is empowered, by RCW 82.20.020, to prescribe an expedient method for affixing stamps, but we find nothing in the statute requiring the maker, signer, or issuer‑- in short, the vendor‑-to apply the stamp.  Assuming, however, that the Rule is valid, that one must paste on the stamp does not mean that he must also pay the tax.  The Tax Commission we think has recognized this in the first paragraph of the Rule, at page 97:

            "* * *  The tax is paid by means of stamps to be affixed to the instrument, document or paper conveying the property, by the person making, signing, issuing or accepting any such instrument.  * * *" (Emphasis supplied)

             [[Orig. Op. Page 3]]

            If the clause last underscored describes only those who are to affix stamps it contradicts the previously quoted portion of the Rule relating to that duty, by its inclusion of the person accepting the instrument.  To avoid attributing inconsistency to the makers of the Rule, we must conclude that the part of the Rule last quoted means, in effect, that the tax may be paid by the person accepting, as well as by the person issuing, the document.

            It is also possible that the confusion originates in earlier statements released by this office.  In an opinion given to the Director of Highways on June 3, 1935, it is said that the burden of the tax is primarily upon the seller, since the deed cannot legally be issued without payment of the tax.  That opinion, however, contains the following qualification:

            "* * *  I am not prepared to hold, however, that in the ordinary case of a transfer between private parties a tax is not imposed upon the buyer.  * * *

            "In the event that you find it necessary to make a bargain with the seller that you will pay the amount of the tax, you will simply be doing something for the seller that of course would be a matter of agreement."

            On September 21, 1935, the same author addressed the following brief letter to the Prosecuting Attorney of Snohomish County upon the question now under consideration:

            "In answer will say that the grantors must pay the tax set forth in Chapter 180, section 53, Laws of 1935, at page 738.

            "The vendor is supposed to clear the title and it would be necessary for him to pay the tax."

            On July 31, 1942, an opinion was rendered for the Director of Game touching this matter, wherein it is said of both the state and federal conveyance taxes:

            "* * *  In each case the tax is upon the transaction  [[Orig. Op. Page 4]] and both the vendor and vendee are liable for the payment thereof.  By custom such taxes are paid by the vendor in the absence of a different agreement."

            Copies of all three of those statements have been attached for your convenience.  Only the letter of September, 1935, could possible be read to mean that the tax is laid upon the vendor alone.  We suggest that the reason given therein for the result expressed is unsound, and that insofar as the result conflicts with that reached in the other two opinions it should be disregarded.

            The Supreme Court has considered the statute only once, in Jenks v. State, 188 Wash. 472, 63 P. (2d) 369.  Jenks, as State Supervisor of Banking, was liquidating a bank, and in the process was required to pay from the assets a conveyance tax both upon deeds issued to him as grantee and by him as grantor.  The action was for a refund of the taxes paid.  The order of the Tax Commission denying the refund was affirmed; and the fact that apparently nobody considered that the tax would apply to the Supervisor only as vendor or only as purchaser lends tacit support to our conclusion.

            As is indicated by the cited opinion of July 31, 1942, RCW 82.20.010 is the putative offspring of § 3482, Title 26, U.S.C.A.  Section 3482 refers to any

            "Deed, instrument, or writing * * * whereby any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, her, or their direction, * * *"

            Under § 1809 of the same Title,

            "The tax imposed by this chapter shall be paid by any person who makes, signs, issues, sells, removes, consigns, or ships any of the documents [including deeds] * * * or for whose use or benefit the same are made, signed, issued, sold, removed, consigned, or shipped.  * * *"

            We think the effect of section 1809 is roughly the same as that of RCW 82.20.060, the closest analogy in our statute:

             [[Orig. Op. Page 5]]

            "Each of the following acts is hereby declared to be a gross misdemeanor and punishable as such: (1) To take, sign, issue, or accept, or cause to be made, signed, issued, or accepted, any instrument of any kind without the full amount of the tax thereon being duly paid; * * *"

            The federal provisions are thoroughly discussed in Endler v. United States, 110 Fed.Supp. 945 (D.C. N.J. 1953), and the court reaches the same conclusion with regard to the federal statute as we have upon RCW 82.20.010.

            In view of what has been said, we deem it appropriate to borrow the language of U.S. Treasury Regulation 71, § 113.2 (1941), as set out in theEndler case, to describe the operation of RCW 82.20.010:

            "'The tax is payable by any of the parties to a taxable transaction.  The parties to the transaction may agree among themselves as to which shall pay the tax, but such agreement does not relieve the others from their liability in the event it is not carried out.  * * *'"

            We sincerely hope this problem will give you no further difficulty.

Very truly yours,

Attorney General

Assistant Attorney General