Tax Type
Recordation Tax
Description
Exemption under 12 U.S.C.A. Sec. 1441a(g)
Topic
Exemptions
Date Issued
05-08-1995
May 8, 1995
Re: §58.1 -1821 Application: Recordation Tax
Dear ******************
This is in response to your November 12, 1992 letter in which you, on behalf of the appeal the *************assessment of recordation taxes during 1992. I apologize for the inexcusable delay in responding to your request.
FACTS
The*********acting in its capacity as receiver or conservator for failed financial institutions, presented a Trustee's Deed for recordation in a Virginia Circuit Court. In connection with the recordation of this deed, the paid state recordation taxes imposed under Code of Virginia §58.1-801 (the "grantee's tax") and Code of Virginia § 58.1-802 (the "grantor's tax").
You aver the********** is exempt from all recordation taxes and request a refund. You cite as authority an Opinion of the Attorney General dated April 2, 1992. In this Opinion, the******** was held as exempt from payment of recordation taxes on instruments to which it is party. (1992 Att'y Gen. Ann. Rep. 183.)
RULING
The ********* was established by 12 U.S.C.A. §1441a as a corporation which is an instrumentality of the United States. Under §1441a(g), the ********is exempt from state, municipal and local taxes except for taxes on real estate. The Virginia Supreme Court held in The Federal Land Bank of Baltimore v. Hubard, 163 Va. 860 (1935), that recordation taxes are not taxes on real estate.
In the 1992 opinion you cite, the Attorney General addressed specific questions about the ****and its exemption. While it is evident from this Opinion that the********** is an exempt party in transactions involving the recordation tax, nothing in this Opinion indicates this exemption extends to other parties to transactions involving the*********.
The Virginia Recordation Tax Act, Code of Virginia §58.1-800 et seq., imposes the state tax on the recordation of documents relating to real estate transactions. The incidence to whom specific liability for payment of the tax falls does vary. By statute, the grantors tax is specifically imposed on the grantor of a deed. The grantee tax, while silent by statute as to specific liability, has been interpreted as falling upon the purchaser or grantee. (See Federal Land Bank, 163 Va. at 864.)
In an Opinion dated February 26, 1993, the Attorney General further elaborated on the scope of the *********exemption from state recordation tax. (See 1993 Att'y Gen. Ann. Rep. 260, copy attached.) The facts and circumstances in this Opinion are in all material respects analogous to the situation at hand. In this Opinion, the Attorney General explored the ********exemption in regard to the grantor's tax when a Trustee's Deed was presented for recordation. In short, the Attorney General held that while the******** is an exempt party in recordation tax transaction, the*********participation in such a transaction does not exempt the entire transaction from recordation tax.
In the instance case, the*******is the grantee. Virginia law specifically imposes the grantor's tax on the grantor. Consequently, the*********exemption is inapplicable to the grantor's tax, as the incidence of the tax falls upon the mortgagor or owner of the property rather than the***********.
Therefore, your request for refund of grantor's tax imposed under Code of Virginia §58.1-802 must be denied. However, the****exemption unquestionably applies to recordation tax assessed under Code of Virginia §58.1-801. A refund for this portion of the tax, **********, plus accrued interest from the date of payment, will be sent to you as soon as possible.
If you have any questions concerning this matter, please contact the department.
-
-
-
-
-
-
-
-
-
-
-
- Sincerely,
Danny M. Payne
Tax Commissioner
- Sincerely,
-
-
-
-
-
-
-
-
-
-
Rulings of the Tax Commissioner