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Excise Taxes

Excise Tax is a tax on the sale of real estate. The real estate excise tax is typically paid by the seller of the property, although the

buyer is liable for the tax if it is not paid. The tax applies to the seller. The tax also applies to transfers of controlling interests (50%

or more) in entities that own property in the state.

County treasurers collect the state and local taxes, except for the tax that applies to acquisition of controlling interests which is

reported directly to the Department of Revenue.

The state tax rate is .0128. City and county rates vary depending on the area.

Property Taxes

Homeowners pay property taxes to their appropriate assessment, collection or franchise tax department in each county. A change

in ownership or the completion of new construction could result in a change in the assessed value of the property and may result

in the issuance of a supplemental property tax bill. Taxes are due on predesignated dates and become delinquent when not paid.

Penalties are assessed for delinquent taxes. The yearly “tax calendar” varies by state.

In addition to standard property taxes, many jurisdictions also contain special assessment districts, which may have been formed

as a means of financing infrastructure. Bonds may have been sold to finance the infrastructure and the ultimate property owner

continues to make payments on the principal and interest on the bond. The bond issues vary in size and term. Other special city

and county districts may be assessed for a variety of purposes, including street lights and traffic signals, street maintenance, certain

educational purposes, etc.

Change of Ownership Filings

When property changes hands, local government agencies require notice of change of ownership. At the local level, this would be

any county office that assesses or collects taxes. Reporting a change in the ownership of the property allows the local jurisdiction to

assess the tax liability for each property as the title is transferred from seller to buyer.

The reporting documents vary from state to state, but all states require at minimum the names of the seller and buyer, assessor’s

parcel number or other property identifying number, the property location and tax address.

The escrow officer will generally assist the client in completing the document and ensuring that it reaches the Recorder’s Office

along with the other documents pertinent to the change of ownership.

Some situations which appear to be a change of ownership are exempt from the filing of this type of document, including

corrections to the record and status changes such as a change in vesting.

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TAXES