[Adopted 12-31-1986 by Ord. No. 2879 (Art.
333 of the 1965 Codified Ordinances)]
This realty transfer tax is levied under authority
of Article XI-D, entitled "Local Real Estate Transfer Tax," of the
Pennsylvania Real Estate Transfer Tax Act, which is a new article
added by Act 77-1986 (Act of July 2, 1986, No. 77) to the Pennsylvania
Real Estate Transfer Tax Act, Act 14-1981 (Act of May 5, 1981, No.
14, P.L. 36), as amended. The Pennsylvania Real Estate Transfer Tax
Act is codified at 72 P.S. § 8101-C et seq., and Article
XI-D is codified at 72 P.S. § 8101-D et seq.
A.
ASSOCIATION
CITY
COLLECTOR
CORPORATION
DOCUMENT
FAMILY FARM CORPORATION
(1)
(2)
(3)
(4)
(5)
MEMBERS OF THE SAME FAMILY
PERSON
REAL ESTATE
(1)
(2)
(3)
REAL ESTATE COMPANY
(1)
(2)
REAL ESTATE TRANSACTION
TITLE TO REAL ESTATE
(1)
(2)
VALUE
(1)
(2)
(3)
(4)
The following words when used in this article shall
have the meanings ascribed to them in this section, except 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.
The City of Easton, Pennsylvania.
The Recorder of Deeds of Northampton County, Pennsylvania,
who is hereby appointed collector of the tax levied by this article.
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 within the City 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 days. 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 § 535-52.
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 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.
Any individual, such individual's brothers and sisters, the
brothers and sisters of such individual's parents and grandparents,
the ancestors or 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.
Every natural person, association, corporation or entity
of any kind. 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, 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; 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. 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 of calculating
the rental charge is established.
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 thereof, 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 the document 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, value shall
be the actual monetary worth of the real estate within the City, 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 in which the City is located
as established by the State Tax Equalization Board, or a commensurate
part of the assessment where the assessment includes other real estate.
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.
B.
The singular shall include the plural, and the masculine
shall include the feminine and neuter.
A tax is hereby levied and imposed for general
City revenue purposes on every real estate transaction, at the rate
of 1% of the value of the real estate represented by the document
involved in the real estate transaction.
A.
The tax shall be payable at the earlier of the time
the document is presented for recording, within 30 days of acceptance
of the document, or within 30 days of becoming an acquired company.
B.
If the real estate is located partially within and
partially outside the City, the tax shall be calculated on the value
of the portion within the City.
C.
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 penalties imposed under
this article.
D.
It is the intent of this article that the entire burden
of the tax imposed on the real estate transaction by the City and
other political subdivision shall not exceed the limitations prescribed
in Section 8 of the Local Tax Enabling Act, 53 P.S. § 6908,
so that if any other political subdivision imposes a tax on real estate
transactions taxed under this article, the provisions of such Section
8 shall apply.
The payment of the tax imposed hereunder shall
be evidenced by the Collector affixing on the document an official
stamp or writing setting forth the date of payment of the tax and
amount of tax paid.
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 to 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 such reconveyance is made within one year
from the date of condemnation.
(2)
A document which the City 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 brother or sister of the spouse of a brother
or sister, and between and 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 Collector 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 of an ordinary trust.
(10)
A transfer for no or nominal actual consideration
from trustee to successor trustee.
(11)
A transfer:
(a)
For no or nominal actual consideration between
principal and agent or straw party; or
(b)
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 City reasonably determines that 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:
(a)
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
(b)
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 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.
(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
tax-exempt status pursuant to Section 501(c)(3) of the Internal Revenue
Code of 1954 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 an 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 § 535-51, 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.
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, 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 the real estate holdings of the acquired company in the City.
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
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.
Where there is a conveyance by deed of real estate
which was previously sold under the 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.
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)
Make, execute, deliver, accept or present for recording
or cause to be made, executed, delivered, 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; or
(4)
Fail, neglect or refuse to comply with or violate
other provisions of this article or any rules and regulations promulgated
by the City 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 violating any provision of this section
shall be guilty of a summary offense.
C.
A person who makes a false statement of value or declaration
of acquisition, when he does not believe the statement or declaration
to be true, is guilty of a misdemeanor of the second degree.
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.
In addition, if any tax owing under the terms of this
article shall not be paid when due, a penalty shall accrue on the
amount of the unpaid tax at the rate of 1% per month or fractional
part of the month from the due date until the amount of the tax is
paid in full.
C.
In addition, 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 City 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 the month from the due date until the amount of 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.
In addition, if any part of the underpayment of tax
is due to fraud, there shall be added to the tax an amount equal to
50% of the underpayment.
E.
In addition, if the City files suit in order 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 attorney's fees incurred by the
City 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. In order
to enforce the lien, the City 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 the 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.
In order to determine whether the proper amount of
tax has been paid, without limiting any other rights of the City,
the City 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 City 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 as determined by the
City. Upon request of the City and at such place and time as specified
by the City, any party shall make available to the City any documents
or records requested by the City.
B.
In the event any tax is not paid when due, the City
may enforce payment of the tax, together with all penalties, by suit
in assumpsit or any other appropriate means.
A.
As provided in 16 P.S. § 11011-6, the County
Recorder of Deeds shall be the collection agent for this tax, without
compensation from the City.
B.
In order to ascertain the amount of taxes due 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 City 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 payment of tax as required under this article as is
indicated in the document or accompanying statement of value shall,
upon summary conviction, be sentenced to pay a fine of $50 and costs
of prosecution.
The City may promulgate and enforce reasonable
rules and regulations for the interpretation, collection and enforcement
of the tax.
A.
To the extent this article imposes a tax on a real
estate transaction which is subject to the Commonwealth of Pennsylvania
realty transfer tax imposed by Act 77-1986, and to the extent not
inconsistent herewith or with rules or regulations adopted by the
City, this article shall be interpreted in the same manner as Act
77-1986 and in accordance with regulations promulgated thereunder.
B.
The provisions of this article, so far as they are
the same as those of ordinances in force immediately prior to adoption
of this article, are intended as a continuation of such ordinances
and not as new enactments.
C.
This article is intended to supplement the realty
transfer tax in effect prior to adoption of this article by imposing
a tax on real estate transactions not covered by prior ordinances
and now taxable under Act 77-1986. This article shall impose a tax
on all transactions taxable under ordinances levying a realty transfer
tax in force immediately prior to adoption of this article and also
on all transactions which the City is permitted to tax under Act 77-1986
to the fullest extent permissible.
D.
To the extent the provisions of this article tax real
estate transactions taxable under ordinances levying a realty transfer
tax in force immediately prior to adoption of this article, this article
shall supersede such prior ordinances.
E.
In the event this article is declared invalid, the
prior ordinance or ordinances of the City levying a realty transfer
tax shall remain in full force and effect and shall not be affected
in any way by adoption of this article.
F.
The provisions of this article shall not affect any
act done or liability incurred, nor shall they affect any suit or
prosecution pending or to be instituted to enforce any right or penalty
or to punish any offense under the authority of any ordinance in force
prior to adoption of this article.
This article shall become effective immediately
and shall continue in force hereafter without annual reenactment.
