Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1952 No. 437 -
Attorney General Smith Troy


The real estate sales tax applies to the entire selling price of land without deduction for improvements retained by the seller except as that reduces the total price.

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                                                               December 12, 1952 

Honorable W. A. Bugge
Director of Highways
Transportation Building
Olympia, Washington                                                                                                              Cite as:  AGO 51-53 No. 437

 Dear Sir:

             You request our opinion whether

             when the vendor of land separates and retains the improvements may, in the computation of the real estate sales tax, a portion of the purchase price be allocated to the improvements and the tax paid only on the balance as representing the value of the bare land.

             We conclude

             that it may not.  The tax is due on the entire amount paid by the vendee to the vendor.


             The general rule is that sale of improvements separate from the land with the intention of immediate severance from the soil equals a sale of personal rather than real property.  SeeElmonte Investment Co. v. Schafer Bros. Logging Co., 192 Wash. 1, 72 P. (2d) 311 (1937), and France v. Deep River Logging Co., 79  [[Orig. Op. Page 2]] Wash. 336, 140 Pac. 361 (1914).  However, a sale which does not contemplate or does not require immediate severance is a sale of real property.  See our opinion to Skagit County Prosecuting Attorney dated February 5, 1952 [[Opinion No. 51-53-234]].

             Thus, as you indicate in your example, if the vendor retains the improvements and the contract contemplates immediate severance, that is, within a reasonable time, the improvements may become personal property,but they are not sold to anyone.  The vendor has retained them.  Basically, the consideration or selling price is the amount.

             "paid or delivered or contracted to be paid or delivered" RCW 28.45.030.

             for the land as it is received.  What factors the parties consider in computing that selling price as between them is of no consequence as the statute imposes the tax upon the whole.

 Very truly yours,
Attorney General 

Assistant Attorney General