[Adopted 5-18-1987 by Ord. No. 102]
This article shall be known as the "Realty Transfer
Tax Ordinance of Washington Township, Franklin County, Pennsylvania."
A realty transfer tax for general revenue purposes
is hereby imposed upon the transfer of real estate or interest in
real estate situate within the Township of Washington, regardless
of where the documents making the transfer are made, executed or delivered,
or where the actual settlements on such transfer took place, all as
authorized by the Act of December 31, 1965, P.L. 1257, as amended,
known as "The Local Tax Enabling Act."[1] Pursuant to Act 77 of 1986, the General Assembly of this
Commonwealth amended the realty transfer tax provisions of the Tax
Reform Code of 1971, and permitted, among other things, the taxing
of certain transactions which were heretofore exempt from taxation.
By this article, Washington Township intends to bring its real estate
transfer tax into conformity with the provisions of Act 77 of 1986,
and to tax real estate transactions to the fullest extent permissible
under the aforesaid Act.
[1]
Editor's Note: See 53 P. S. § 6901 et seq.
The following words, when used in this article,
shall have the meanings ascribed to them in this section except in
those instances where the context clearly indicates a different meaning:
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.
A corporation, joint-stock association, business trust, or
banking institution which is organized under the laws of this commonwealth,
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 § 317-33 of this article.
A corporation of which at least 75% of its assets are devoted
to the business of agriculture and at least 75% of each class of stock
of the corporation is continuously owned by members of the same family.
The business of agriculture shall include the leasing to members of
the same family of property which is directly and principally used
for agricultural purposes. The business of agriculture shall not be
deemed to include:
[Amended 11-16-2009 by Ord. No. 224]
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.
A partnership of which at least 75% of its assets are devoted
to the business of agriculture and at least 75% of the interests in
the partnership are continuously owned by members of the same family.
The business of agriculture shall include the leasing to members of
the same family of property which is directly and principally used
for agricultural purposes. The business of agriculture shall not be
deemed to include:[1]
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.
Manufacturing or processing operations of any
kind.
Any trust, other than a business trust, intended as a will
substitute by the settlor which becomes effective during the lifetime
of the settlor, but from which trust distributions cannot be made
to any beneficiaries other than the settlor prior to the death of
the settlor.[2]
Any 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 legal adoption shall be treated as if
they were related by the whole-blood.
Any trust, other than a business trust or a living trust,
which takes effect during the lifetime of the settlor and for which
the trustees of the trust take title to property primarily for the
purpose of protecting, managing or conserving it until distribution
to the named beneficiaries of the trust. An ordinary trust does not
include a trust that has an objective to carry on business and divide
gains, nor does it either expressly or impliedly have any of the following
features: the treatment of beneficiaries as associates, the treatment
of the interests in the trust as personal property, the free transferability
of beneficial interests in the trust, centralized management by the
trustee or the beneficiaries, or continuity of life.[3]
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.
All lands, tenements or hereditaments within
the Township of Washington, County of Franklin, State 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 or 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 thirty-five 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.
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; or
Any interest in real estate enduring for a fixed
period of years but which, either by reason of the length of the term
or 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.
The Township of Washington, County of Franklin, Commonwealth
of Pennsylvania.
The making, executing, delivering, accepting, or presenting
for recording of a document.
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
other 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 is determined by adjusting the assessed
value of the real estate for local real estate tax purposes for the
common level ratio factor developed by the Pennsylvania Department
of Revenue for Pennsylvania realty transfer tax base calculations;
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 principle of
the grantor of a related corporation, association or partnership and
the grantee existing before or effective with the transfer.
A.
Persons subject to tax; rate of tax. 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, a tax at the rate
of 1% of the value of the real estate represented by such document,
which tax shall be payable at the earlier of the time the document
is presented for recording or within 30 days of acceptance of such
document or within 30 days of becoming an acquired company.
B.
Evidence of payment. The payment of the tax imposed
herein shall be evidenced by the affixing of an official stamp or
writing by the recorder whereon the date of the payment of the tax,
amount of the tax and the signature of the collecting agent shall
be set forth.
C.
Limitation on amount of tax. It is the intent of this
article that the entire burden of the tax imposed herein on a person
or transfer shall not exceed the limitations prescribed in the Local
Tax Enabling Act, Act of December 31, 1965, P.L. 1257, 53 P.S. § 6901
et seq., so that if any other political subdivision has imposed or
hereafter shall impose such tax on the same person or transfer then
the tax levied by Washington Township under the authority of that
Act shall, during the time such duplication of the tax exists, except
as hereinafter otherwise provided, be 1/2 of the rate and such one-half
rate shall become effective without any action on the part of the
Supervisors of Washington Township; provided, however, that the Supervisors
of Washington Township and any other political subdivision which imposes
such tax on the same person or transfer may agree that, instead of
limiting their respective rates to 1/2 of the rate herein provided,
they will impose respectively different rates, the total of which
shall not exceed the maximum rate permitted under the Local Tax Enabling
Act.
D.
Interest. If for any reason the tax is not paid when
due, interest at the rate in effect at the time the tax is due shall
be added and collected.
The United States, the commonwealth, or any
of their instrumentalities, agencies or political subdivisions shall
be exempt from payment or the tax imposed by this article. The exemption
of such governmental bodies shall not, however, relieve any other
party to a transaction from liability for the tax.
A.
The tax imposed by § 317-29 shall not be imposed upon:
(1)
Transfer to commonwealth. A transfer to the commonwealth,
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
fine adjustments provided said reconveyance is made within one year
from the date of condemnation.
(2)
Documents prohibited by federal law. A document which
the Township of Washington is prohibited from taxing under the Constitution
or statutes of the United States.
(3)
Transfer to governmental body at sheriff sale. 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)
Deeds of correction. 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)
Transfers by will or intestate succession. A transfer
of 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)
Certain family transactions. 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 brother or sister or the 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)
Certain transfers from estates. 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)
Certain transfers to trustees. 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
that are entitled to receive the property or proceeds from the sale
of the property under the trust, whether or not such beneficiaries
are contingent or specifically named. A trust clause which identifies
the contingent beneficiaries by reference to the heirs of the trust
settlor as determined by the laws of the intestate succession shall
not disqualify a transfer from the exclusion provided by this clause.
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.[1]
(9)
A
transfer for no or nominal actual consideration to a trustee of a
living trust from the settlor of the living trust. No such exemption
shall be granted unless the recorder of deeds is presented with a
copy of the living trust instrument.[2]
(10)
Transfers from trustee to beneficiary. A transfer
for no or nominal actual consideration from a trustee of an ordinary
trust to a specifically named beneficiary that is entitled to receive
the property under the recorded trust instrument or to a contingent
beneficiary where the transfer of the same property would be exempt
if the transfer was made by the grantor of the property into the trust
to that beneficiary. However, any transfer of real estate from a living
trust during the settlor's lifetime shall be considered for the purposes
of this article as if such transfer were made directly from the settlor
to the grantee.[3]
(11)
A transfer for no or nominal actual consideration from a trustee
of a living trust after the death of the settlor of the trust or from
a trustee of a trust created pursuant to the will of a decedent to
a beneficiary to whom the property is devised or bequeathed.[4]
(13)
Transfer from trustee to successor trustee.
A transfer for no or nominal actual consideration from trustee to
successor trustee.
(14)
Principal and agent or straw party transactions.
(a)
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.
(b)
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 clause.
(15)
Transfers by merger of corporations. A transfer
made pursuant to the statutory merger or consolidation of a corporation
or statutory division of a nonprofit corporation, except where the
department reasonably determines that the primary intent for such
merger, consolidation or division is avoidance of the tax imposed
by this article.
(16)
Certain corporate transfers to stockholders.
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.
(17)
Transfers from nonprofit industrial development
agencies. 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 or the grantee or a transfer
to a nonprofit industrial development agency or authority.
(18)
Other transfers from nonprofit industrial development
agencies. 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 conversion, energy
production, pollution control, warehousing or agriculture; and the
agency or authority has the full ownership interest in the real estate
transferred.
(19)
Transfer by mortgagor. A transfer by a mortgagor
to the holder of a bona fide mortgage in default in lieu of a 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.
(20)
Transfer to religious organizations. 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 transfer or for commercial purposes.
(21)
Transfers to exempt organizations. A transfer
to a conservancy which possesses a tax exempt status pursuant to Section
501(c)(3) of the Internal Revenue Code of 1954 [68A Stat. 3, 26 U.S.C.
§ 501(c)(3)] and any amendments thereto and which has as
its primary purpose preservation of land for historic, recreational,
scenic, agricultural or open space opportunities or a transfer from
such a conservancy to the United States, the commonwealth or to any
of their instrumentalities, agencies or political subdivisions; or
any transfer from such a conservancy where the real estate is encumbered
by a perpetual agricultural conservation easement as defined by the
act of June 30, 1981 (P.L. 128, No. 43), known as the "Agricultural
Area Security Law,"[6] and such conservancy has owned the real estate for at
least two years immediately prior to the transfer.[7]
(22)
Transfer to family farm corporation. 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.
(23)
A transfer of real estate devoted to the business of agriculture
to a family farm partnership by a member of the same family, which
family directly owns at least 75% of the interests in the partnership.[8]
(24)
Transfers of family ownership of family farm
corporations or family farm partnerships. A transfer between members
of the same family of an ownership interest in a real estate company,
family farm corporation or family farm partnership which owns real
estate.[9]
(25)
De minimis transactions. A transaction wherein
the tax due is $1 or less.
(26)
Mineral leases. 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 § 317-31, the true, full and complete value of the transfer shall be shown on the statement of value. A copy of the Pennsylvania Realty Transfer Tax Statement of Value may be submitted for this purpose. 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 § 317-31, 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.
Definition. A real estate company is an acquired company
upon a change in the ownership interest in the company, however effected,
if the change does not affect the continuity of the company; and of
itself or together with prior changes has the effect of transferring,
directly or indirectly, 90% or more of the total ownership interest
in the company within a period of three years.
B.
When family farm corporation is an acquired company.
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.
Declaration of acquisition; contents; time for filing.
Within 30 days after becoming an acquired company, the company shall
present a declaration of acquisition with the recorder of each county
in which it holds real estate for the affixation of documentary stamps
and recording. Such declaration shall set forth the value of real
estate holdings of the acquired company in such county. A copy of
the Pennsylvania Realty Transfer Tax Declaration of Acquisition may
be submitted for this purpose.
A.
Transfers by real estate brokers. 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.
Transfers by residential builders. 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.
Transfer of property leased by grantor. Where there
is a transfer of real estate which is leased by the grantor, a credit
for the amount of tax paid at the time of the lease shall be given
the grantor toward the tax due upon the transfer.
D.
Transfer under land contract. 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.
Credit adjustments. 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 or
tax due, no refund or carryover credit shall be allowed.
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.
The tax herein imposed 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,
except the state realty transfer tax, and the sheriff or other officer
conducting said sale, shall pay the tax herein imposed out of the
first moneys 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.
Collection agent. As provided in 16 P.S. § 11011-6,
as amended by Act of July 7, 1983 (P.L. 40, No. 21), the recorder
of deeds shall be the collection agent for the local realty transfer
tax, including any amount payable to the Township of Washington based
on a redetermination of the amount of tax due by the Commonwealth
of Pennsylvania of the Pennsylvania realty transfer tax, without compensation
from the Township of Washington.
B.
Statement of value. In order to ascertain the amount
of taxes due when the property is located in more than one political
subdivision, the recorder shall not accept for recording such a deed
unless it is accompanied by a statement of value or indicated on the
document showing what taxes are due each municipality.
C.
Time for payments to Township. On or before the tenth
of each month, the recorder shall pay over to the Township of Washington
all local realty transfer taxes collected, less 2% for use of the
county, together with a report containing the information as is 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.
Rerecording. Upon a redetermination of the amount
of realty transfer tax due by the Commonwealth of Pennsylvania, the
recorder shall rerecord the deed or record the additional realty transfer
tax form only when both the state and local amounts and a rerecording
or recording fee has been tendered.
Every document lodged with or presented to the recorder of deeds for recording shall set forth therein and as a 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. A copy of the Pennsylvania Realty Transfer Tax Statement of Value may be submitted for this purpose. The provisions of this § 317-38 shall not apply to any excludable real estate transfers which are exempt from taxation based on family relationship. Other documents presented for the affixation of stamps shall be accompanied by a certified copy of the document and 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.
A.
Underpayment. If any part of any underpayment of tax
imposed by this article is due to fraud, there shall be added to the
tax an amount equal to 50% of the underpayment.
B.
Failure to record declaration. In the case of failure
to record a declaration required under this article on the date prescribed
therefor, unless it is shown that such failure is due to reasonable
cause, there shall be added to the tax 5% of the amount of such tax
if the failure is for not more than one month, with an additional
5% for each additional month or fraction thereof during which such
failure continues, not exceeding 50% in the aggregate.
The tax imposed by this article shall become
a lien upon the lands, tenements, or hereditaments, or any interest
therein, lying, being situated, wholly or in part within the boundaries
of the Township of Washington, which lands, tenements, hereditaments,
or interest therein, are described in or conveyed by or transferred
by the deed which is the subject of the tax imposed, assessed and
levied by this article, said lien to begin at the time when the tax
under this article is due and payable, and continue until discharge
by payment, or in accordance with the law, and the solicitor is authorized
to file a municipal or tax claim in the Court of Common Pleas of Franklin
County, in accordance with the provisions of the Municipal Claims
and Liens Act of 1923, 53 P.S. § 7101 et seq., its supplements
and amendments.
All taxes imposed by this article, together
with interest and penalties prescribed herein, shall be recoverable
as other debts of like character are recovered.
The Township of Washington is charged with enforcement
and collection of tax and is empowered to promulgate and enforce reasonable
regulations for enforcement and collection of the tax. The regulations
which have been promulgated by the Pennsylvania Department of Revenue
under 72 P.S. § 8101-C et seq. are incorporated into and
made a part of this article.
