[Adopted 12-18-1990 by Ord. No. 321]
This article shall be known as the "Derry Township
Realty Transfer Tax Ordinance."
A realty transfer tax for general revenue purposes
is hereby imposed upon the transfer of real estate or interests in
real estate situate within Derry Township, regardless of where the
documents making the transfer are made, executed or delivered, or
where actual settlements or such transfer took place as authorized
by authority of Section 17 of Act 77 of 1986 (72 P.S. § 8101-D),
and under the authority of The Local Tax Enabling Act, Act of December
31, 1965, P.L. 1257, No. 511, 53 P.S. § 6901 et seq.
Unless otherwise expressly stated, the following
terms, when used in this article, shall have the meaning ascribed
to them in this section:
A partnership, limited partnership or any other form of unincorporated
enterprise owned or conducted by two or more persons other than a
private trust or decedent's estate.
The Recorder of Deeds of Dauphin County, Pennsylvania.
A corporation, joint-stock association, business trust or
banking institution which is organized under the laws of the Commonwealth
of Pennsylvania, the United States or any other state, territory,
foreign country or dependency.
Any deed, instrument or writing which conveys, transfers, demises, vests, confirms or evidences any transfer or demise of title to real estate, but does not include wills, mortgages, deeds of trust or other instruments of like character given as security for a debt and deeds of release thereof to the debtor, land contracts whereby the legal title does not pass to the grantee until the total consideration specified in the contract has been paid or any cancellation thereof unless the consideration is payable over a period of time exceeding 30 years, or instruments which solely grant, vest or confirm a public utility easement. "Document" shall also include a declaration of acquisition required to be presented for recording under § 189-49 of this article.
A corporation of which:
At least 75% of its assets are devoted to the
business of agriculture, which business shall not be deemed to include
recreational activities such as, but not limited to, hunting, fishing,
camping, skiing, show competition or racing; the raising, breeding,
or training of game animals or game birds, fish, cats, dogs or pets
or animals intended for use in sporting or recreational activities;
fur farming; stockyard and slaughterhouse operations; or manufacturing
or processing operations of any kind; and,
At least 75% of each class of stock of the corporation
is continuously owned by members of the same family.
An individual, such individual's brothers and sisters, the
brothers and sisters of such individual's parents and grandparents,
the ancestors and lineal descendants of any of the foregoing, a spouse
of any of the foregoing, and the estate of any of the foregoing. Individuals
related by the half blood or by legal adoption shall be treated as
if they were related by the whole blood.
Every natural person, association or corporation. Whenever
used in any clause prescribing and imposing a fine or imprisonment,
or both, the term "person" as applied to associations shall include
the responsible members or general partners thereof, and as applied
to corporations, the officers thereof.
Any lands, tenements or hereditaments within
the Township of Derry, Dauphin County, Commonwealth of Pennsylvania,
including, without limitation, buildings, structures, fixtures, mines,
minerals, oil, gas, quarries, spaces, with or without upper or lower
boundaries, trees, and other improvements, immovables or interests
which by custom, usage or law pass with a conveyance of land, but
excluding permanently attached machinery and equipment in an industrial
plant.
A condominium unit.
A tenant-stockholder's interest in a cooperative
housing corporation, trust or association under a proprietary lease
or occupancy agreement.
A corporation or association which is primarily engaged in
the business of holding, selling or leasing real estate 90% or more
of the ownership interest in which is held by 35 or fewer persons
and which derives 60% or more of its annual gross receipts from the
ownership or disposition of real estate or holds real estate, the
value of which comprises 90% or more of the value of its entire tangible
asset holdings exclusive of tangible assets which are freely transferable
and actively traded on an established market.
The making, executing, delivering, accepting or presenting
for recording of a document.
Any interest in real estate which endures for
a period of time the termination of which is not fixed or ascertained
by a specific number of years including, without limitation, an estate
in fee simple, life estate or perpetual leasehold.
Any interest in real estate enduring for a fixed
period of years but which, either by reason of length of the term
or of the grant of a right to extend the term by renewal or otherwise,
consists of a group of rights approximating those of an estate in
fee simple, life estate or perpetual leasehold including, without
limitation, a leasehold interest or possessory interest under a lease
or occupancy agreement for a term of 30 years or more or a leasehold
interest or possessory interest in real estate in which the lessee
has equity. In determining the term of a lease, it shall be presumed
that a right or option to renew or extend a lease will be exercised
if the rental charge to the lessee is fixed or if a method for calculating
the rental charge is established.
Township of Derry.
In the case of any bona fide sale of real estate
at arm's length for actual monetary worth, the amount of the actual
consideration therefor, paid or to be paid, including liens or other
encumbrances thereon existing before the transfer and not removed
thereby, whether or not the underlying indebtedness is assumed, and
ground rents, or a commensurate part thereof, where such liens or
other encumbrances and ground rents also encumber or are charged against
others real estate; provided, that where such documents shall set
forth a nominal consideration, the value thereof shall be determined
from the price set forth in or actual consideration for the contract
of sale.
In the case of a gift, sale by execution upon
a judgment or upon the foreclosure of a mortgage by a judicial officer,
transactions without consideration or for consideration less than
the actual monetary worth of the real estate, a taxable lease, an
occupancy agreement, a leasehold or possessory interest, any exchange
of properties, or the real estate of an acquired company, the actual
monetary worth of the real estate determined by adjusting the assessed
value of the real estate for local real estate tax purposes for the
common level ratio of assessed values to market values of the taxing
district as established by the State Tax Equalization Board, or a
commensurate part of the assessment where the assessment includes
other real estate.
In the case of an easement or other interest
in real estate the value of which is not determinable under Subsection
(A) and (B), above, the actual monetary worth of such interest.
The actual consideration for or actual monetary
worth of any executory agreement for the construction of buildings,
structures or other permanent improvements to real estate between
the grantor and other persons existing before the transfer and not
removed thereby or between the grantor, the agent or principal of
the grantor or a related corporation, association or partnership and
the grantee existing before or effective with the transfer.
A.
A tax to provide revenue for general Township purposes
is hereby levied, assessed and imposed upon every real estate transaction.
Every person who makes, executes, delivers, accepts or presents for
recording any document or in whose behalf any document is made, executed,
delivered, accepted or presented for recording shall be subject to
pay for and in respect to the transaction, or any part thereof, or
for or in respect of the vellum parchment or paper upon which such
document is written or printed, a tax at the rate of 1% of the value
of the real estate represented by such document.
B.
The tax shall be payable at the earliest of the time
the document is presented for recording, or within 30 days of acceptance
of the document, or within 30 days of becoming an acquired company.
C.
If the real estate is located partially within and
partially outside the Township, the tax shall be calculated on the
value of the portion within the Township.
D.
The tax imposed hereunder shall be due and payable
to the Collector, as a joint and several liability, by every person
who makes, executes, delivers, accepts or presents for recording any
document, or in whose behalf any document is made, executed, delivered,
accepted or presented for recording. In the case of an acquired company,
the company shall also have liability for payment of the tax. All
such persons shall also be liable for any penalty imposed under this
article.
E.
If for any reason the tax is not paid when due, interest
at the legal rate in effect at the time the tax was due shall be added
and collected.
F.
It is the intent of this article that the entire burden
of the tax imposed on a real estate transaction by the Township and
school district shall not exceed the limitations prescribed in § 8
of The Local Tax Enabling Act, 53 P.S. § 6908, so that if
the school district also imposes a tax on real estate transactions
taxed under this article, the provisions of said § 8 shall
apply.
The United States, the Commonwealth of Pennsylvania,
or any of their instrumentalities, agencies or political subdivisions,
shall be exempt from payment of the tax imposed by this article. The
exemption of such governmental bodies shall not, however, relieve
any other party to a real estate transaction from liability for the
tax.
A.
The tax imposed by this article shall not be imposed
upon:
(1)
A transfer of the Commonwealth of Pennsylvania, or
to any of its instrumentalities, agencies or political subdivisions,
by gift, dedication or deed in lieu of condemnation or deed of confirmation
in connection with condemnation proceedings, or a reconveyance by
the condemning body of the property condemned to the owner of record
at the time of condemnation which reconveyance may include property
line adjustments, provided said reconveyance is made within one year
from the date of condemnation.
(2)
A document which the commonwealth or the Township
is prohibited from taxing under the Constitution or statutes of the
United States.
(3)
A conveyance to a municipality, Township, school district
or county pursuant to acquisition by the municipality, Township, school
district or county of a tax delinquent property at sheriff sale or
Tax Claim Bureau sale.
(4)
A transfer for no or nominal actual consideration
which corrects or confirms a transfer previously recorded, but which
does not extend or limit existing record legal title or interest.
(5)
A transfer or division in kind for no or nominal actual
consideration of property passed by testate or intestate succession
and held by cotenants; however, if any of the parties take shares
greater in value than their undivided interest, tax is due on the
excess.
(6)
A transfer between husband and wife, between persons
who were previously husband and wife who have since been divorced,
provided the property or interest therein subject to such transfer
was acquired by the husband and wife or husband or wife prior to the
granting of the final decree in divorce, between parent and child
or the spouse of such child, between brother or sister or spouse of
a brother or sister and between a grandparent and grandchild or the
spouse of such grandchild, except that a subsequent transfer by the
grantee within one year shall be subject to tax as if the grantor
were making such transfer.
(7)
A transfer for no or nominal actual consideration
of property passing by testate or intestate succession from a personal
representative of a decedent to the decedent's devisee or heir.
(8)
A transfer for no or nominal actual consideration
to a trustee of an ordinary trust where the transfer of the same property
would be exempt if the transfer was made directly from the grantor
to all of the possible beneficiaries, whether or not such beneficiaries
are contingent or specifically named. No such exemption shall be granted
unless the Recorder of Deeds is presented with a copy of the trust
instrument that clearly identifies the grantor and all possible beneficiaries.
(9)
A transfer for no or nominal actual consideration
from a trustee to a beneficiary or any ordinary trust.
(10)
A transfer for no or nominal actual consideration
from a trustee to a successor trustee.
(11)
A transfer for no or nominal actual consideration
between principal and agent or straw party or from or to an agent
or straw party where, if the agent or straw party were his principal,
no tax would be imposed under this article. Where the document by
which title is acquired by a grantee or statement of value fails to
set forth that the property was acquired by the grantee from, or for
the benefit of, his principal, there is a rebuttable presumption that
the property is the property of the grantee in his individual capacity
if the grantee claims an exemption from taxation under this subsection.
(12)
A transfer made pursuant to the statutory merger
or consolidation of a corporation or statutory division of a nonprofit
corporation, except where the primary intent for such merger, consolidation
or division is avoidance of the tax imposed by this article.
(13)
A transfer from a corporation or association
of real estate held of record in the name of the corporation or association
where the grantee owns stock of the corporation or an interest in
the association in the same proportion as his interest in or ownership
of the real estate being conveyed and where the stock of the corporation
or the interest in the association has been held by the grantee for
more than two years.
(14)
A transfer from a nonprofit industrial development
agency or authority to a grantee of property conveyed by the grantee
to that agency or authority as security for a debt of the grantee,
or a transfer to a nonprofit industrial development agency or authority.
(15)
A transfer from a nonprofit industrial development
agency or authority to a grantee purchasing directly from it, but
only if the grantee shall directly use such real estate for the primary
purpose of manufacturing, fabricating, compounding, processing, publishing,
research and development, transportation, energy conservation, energy
production, pollution control, warehousing or agriculture, and the
agency or authority has the full ownership interest in the real estate
transferred.
(16)
A transfer by a mortgagor to the holder of a
bona fide mortgage in default in lieu of foreclosure or a transfer
pursuant to a judicial sale in which the successful bidder is the
bona fide holder of a mortgage, unless the holder assigns the bid
to another person.
(17)
Any transfer between religious organizations
or other bodies or persons holding title for a religious organization
if such real estate is not being or has not been used by such transferor
for commercial purposes.
(18)
A transfer to a conservancy which possesses
a tax exempt status pursuant to § 501(c)(3) of the Internal
Revenue Code of 1954, [68A Stat. 3, 26 U.S.C. § 501(c)(3)],
and which has as its primary purpose preservation of land for historic,
recreational, scenic, agricultural or open space opportunities.
(19)
A transfer of real estate devoted to the business
of agriculture to a family farm corporation by a member of the same
family which directly owns at least 75% of each class of the stock
thereof.
(20)
A transfer between members of the same family
of any ownership interest in a real estate company or family farm
corporation.
(21)
A transaction wherein the tax due is $1 or less.
(22)
Leases for the production or extraction of coal,
oil, natural gas or minerals, and assignments thereof.
B.
In order to exercise any exclusion provided in this
section, the true, full and complete value of the transfer shall be
shown on the statement of value. For leases of coal, oil, natural
gas or minerals, the statement of value may be limited to an explanation
of the reason such document is not subject to tax under this article.
Except as otherwise provided in § 189-45 of this article, documents which make, confirm or evidence any transfer or demise of title to real estate between associations or corporations and the members, partners, shareholders or stockholders thereof are fully taxable. For the purposes of this article, corporations and associations are entities separate from their members, partners, stockholders or shareholders.
A.
Where there is a transfer of a residential property
by a licensed real estate broker which property was transferred to
him within the preceding year as consideration for the purchase of
other residential property, a credit for the amount of the tax paid
at the time of the transfer to him shall be given to him toward the
amount of the tax due upon the transfer.
B.
Where there is a transfer by a builder of residential
property which was transferred to the builder within the preceding
year as consideration for the purchase of new, previously unoccupied
residential property, a credit for the amount of the tax paid at the
time of the transfer to the builder shall be given to the builder
toward the amount of the tax due upon the transfer.
C.
Where there is a transfer of real estate which is
demised by the grantor, a credit for the amount of tax paid at the
time of the demise shall be given the grantor toward the tax due upon
the transfer.
D.
Where there is a conveyance by deed of real estate
which was previously sold under a land contract by the grantor, a
credit for the amount of tax paid at the time of the sale shall be
given the grantor toward the tax due upon the deed.
E.
If the tax due upon the transfer is greater than the
credit given under this Section, the difference shall be paid. If
the credit allowed is greater than the amount of tax due, no refund
or carryover credit shall be allowed.
The payment of the tax imposed hereunder shall
be evidenced by the Collector's affixing on the document an official
stamp or writing setting forth the date of payment of the tax and
the amount of the tax paid.
A.
A real estate company is an acquired company upon
a change in the ownership interest in the company, however effected,
if the change:
B.
With respect to real estate acquired after February
16, 1986, a family farm corporation is an acquired company when, because
of voluntary or involuntary dissolution, it ceases to be a family
farm corporation or when, because of issuance or transfer of stock
or because of acquisition or transfer of assets that are devoted to
the business of agriculture, it fails to meet the minimum requirements
of a family farm corporation under this article.
C.
Within 30 days after becoming an acquired company,
the company shall present a declaration of acquisition to the Collector
for recording and for the affixation of the official stamp or writing
evidencing payment of the tax. Such declaration shall set forth the
value of real estate holdings of the acquired company in the Township.
Every document lodged with or presented to the
Collector for recording shall set forth therein and as part of such
document the true, full and complete value thereof, or shall be accompanied
by a statement of value executed by a responsible person connected
with the transaction showing such connection and setting forth the
true, full and complete value thereof or the reason, if any, why such
document is not subject to tax under this article. The provisions
of this section shall not apply to any excludable real estate transfers
which are exempt from taxation based on family relationship; provided,
the relationship is specified in the deed, instrument or writing.
Documents which are not to be recorded shall be presented to the Collector
and shall be accompanied by a certified copy of the document and a
statement of value executed by a responsible person connected with
the transaction showing such connection and setting forth the true,
full and complete value thereof or the reason, if any, why such document
is not subject to tax under this article. Evidence of payment shall
be affixed to the original document and the certified copy. The certified
copy and statement of value shall be filed with the Collector.
A.
It shall be unlawful for any person to:
(1)
Accept or present for recording or cause to be accepted
or presented for recording any document without the full amount of
tax thereon being duly paid.
(2)
Fail to record a declaration of acquisition, as required
by this article.
(3)
Fraudulently affix to any document any forged evidence
of payment.
(4)
Fail, neglect or refuse to comply with or violate
any other provisions of this article or any rules and regulations
promulgated by the Township under this article, or any rules and regulations
of the Pennsylvania Department of Revenue to the extent applicable
to the tax levied hereunder.
B.
Any person, firm or corporation who shall violate
any provision of this article, upon conviction thereof in an action
brought before a District Justice in the manner provided for the enforcement
of summary offenses under the Pennsylvania Rules of Criminal Procedure,
shall be sentenced to pay a fine of not more than $1,000 plus costs
and, in default of payment of said fine and costs, to a term of imprisonment
not to exceed 90 days. Each day that a violation of this article continues
or each section of this article which shall be found to have been
violated shall constitute a separate offense.
A.
If any tax owing under the terms of this article shall
not be paid when due, 10% of the amount of the tax shall be added
and collected as an initial penalty for nonpayment or underpayment
of the tax.
B.
If any tax owing under the terms of this article shall
not be paid when due, a further penalty shall accrue on the amount
of the unpaid tax at the rate of 1% per month or fractional part of
a month, on the amount of the unpaid tax, from the due date until
the amount of the tax is paid in full.
C.
In the case of failure of any acquired company to
record a declaration of acquisition, as required by this article,
unless it is shown to the satisfaction of the Township that such failure
is due to reasonable cause, a penalty shall accrue on the amount of
the unpaid tax at the rate of 5% per month or fractional part of a
month, from the due date until the tax is paid in full. This penalty
shall be in addition to all other penalties, but shall not in the
aggregate exceed 50% of the amount of the unpaid tax.
D.
If any part of any underpayment of tax is due to fraud,
there shall be added to the tax an amount equal to 50% of the underpayment.
E.
If the Township files suit to collect the amount of
any tax not paid when due under this article, at the discretion of
the court, any person liable for payment of the tax shall also be
liable for reasonable attorneys' fees incurred by the Township in
prosecution of the suit.
F.
No document upon which tax is imposed by this article
shall at any time be made the basis of any action or other legal proceeding,
nor shall proof thereof be offered or received in evidence in any
court of this commonwealth, or recorded in the office of any recorder
of deeds of any county of this commonwealth, unless the tax imposed
hereunder shall have been paid in full and evidence of payment shall
have been affixed thereto by the Collector.
The tax imposed by this article, together with
all penalties, shall be a lien against the real estate to which the
document relates and, in the case of an acquired company, the real
estate owned by the acquired company. The lien shall date from the
time when the tax is due and payable and shall continue until discharged
by payment in full of the tax, together with all penalties. To enforce
the lien, the Township may proceed under the Municipal Claims and
Liens Act of 1923, 53 P.S. § 7101 et seq., or in any other
appropriate manner.
The tax imposed under this article shall be
fully paid, and have priority out of the proceeds of any judicial
sale of real estate before any other obligation, claim, lien, judgment,
estate or costs of the sale and of the writ upon which the sale is
made, and the sheriff or other officer conducting said sale shall
pay the tax herein imposed out of the first monies paid to him in
connection therewith. If the proceeds of the sale are insufficient
to pay the entire tax herein imposed, the purchaser shall be liable
for the remaining tax.
A.
To determine whether the proper amount of tax has
been paid, without limiting any other rights of the Township, the
Township shall have the right to review all documents or records relating
to any real estate transaction or any related transactions, and to
take such other steps as the Township shall deem necessary or appropriate,
including a review or audit of any documents or records of any party
to a real estate transaction to determine the fair market value of
the real estate or any other relevant matter. Upon request of the
Township, and at such place and time as specified by the Township,
any party shall make available to the Township any documents or records
requested by the Township.
B.
In the event any tax is not paid when due, the Township
may enforce payment of the tax, together with all penalties, by suit
in assumpsit or by any other appropriate means.
A.
As provided in 16 P.S. § 11011-6, the Recorder
of Deeds shall be the collection agent for this tax, without compensation
from the Township.
B.
When the property is located in more than one political
subdivision, the Collector shall not accept for recording any document
unless it is accompanied by a statement of value showing what taxes
are due each political subdivision.
C.
On or before the 10th day of each month, the Collector
shall pay over to the Township all taxes collected under this article,
less 2% for use of the county, and shall also provide a report containing
the information required by the Commonwealth of Pennsylvania in reporting
collections of the Pennsylvania Realty Transfer Tax. The 2% commission
shall be paid to the county.
D.
In accordance with Act 77-1986, any Recorder of Deeds
who shall record any document upon which tax is imposed under this
article without receiving payment of the tax shall, upon summary conviction,
be sentenced to pay a fine of $50, and costs of prosecution.
The Township may promulgate and enforce reasonable
rules and regulations for the interpretation, collection and enforcement
of the tax.
