Washington State

Office of the Attorney General

Attorney General

Bob Ferguson

AGO 1963 No. 40 - Jul 25 1963
Attorney General John J. O'Connell


The board of county commissioners does not have the authority by ordinance or resolution to alter the definition of "sale" as it appears in chapter 28.45 RCW so as to exempt a transfer by a property owner to a corporation in which he holds more than a designated portion of the capital stock.

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                                                                    July 25, 1963

Honorable R. DeWitt Jones
Prosecuting Attorney
Clark County
301 Court House
Vancouver, Washington

                                                                                                                Cite as:  AGO 63-64 No. 40

Dear Sir:

            By letter previously acknowledged you have requested an opinion from this office on a question concerning the real estate excise tax.

            Specifically, you ask whether the county commissioners may, by ordinance or resolution, alter the definition of a "sale" as it appears in chapter 28.45 RCW, to exempt a transfer by a property owner to a corporation in which he holds more than a designated portion of the capital stock.

            We answer your question in the negative.


            Counties are authorized to impose by ordinance an excise tax upon real estate sales in an amount not exceeding one percent of the selling price (RCW 28.45.050).  It is expressly provided that the tax shall be levied upon "each sale" of real property within the county (RCW 28.45.060).

            The term "sale" is defined by RCW 28.45.010, and there is no express legislative authority granted a county to exempt any sales from the tax except as may be found in RCW 28.45.035 with respect to leases with option to purchase.  See, AGO 59-60 No. 100 [[to Prosecuting Attorney, Pacific County on February 10, 1960]].

             [[Orig. Op. Page 2]]

            It is a fundamental rule that counties have only such powers in matters of taxation as the state has delegated to them.  Great Northern R. Co. v. Stevens County, 108 Wash. 238, 183 Pac. 65 (1919);State ex rel. School Dist. v. Clark County, 177 Wash. 314, 31 P.2d 897 (1934).  As stated inVance Lumber Co. v. King County, 184 Wash. 402 51 P.2d 623 (1935), at page 409:

            "The state is sovereign in matters of taxation.  The counties are creatures of the state and may enjoy and exercise only such rights, powers and privileges as the state accords to them.  Tacoma v. State Tax Commission, 177 Wash. 604, 33 P.2d 899."

            Power to tax delegated by the state does not include the power to exempt, and governmental subdivisions of the state do not have such power except as the same is expressly granted.  2 Cooley, Taxation, § 670 (4th ed.).

            Moreover, RCW 28.45.110 is indicative of legislative intent not to permit counties to formulate exemptions from the tax.  This section provides that if the tax is levied and a certain amount of money is not realized from such levy, the deficit will be a charge against the general fund of the state.  The more "sales" made nontaxable the greater could be the burden on the state general fund.  We think it highly unlikely that the legislature intended that the counties should have a discretionary power to determine the size of this burden on the state general fund by exempting certain types of sales.

            We are therefore of the opinion that the county commissioners have no authority to exempt any real estate sales from the tax other than those sales expressly exempted by the legislature in chapter 28.45 RCW.

Very truly yours,

Attorney General

Assistant Attorney General