Chapter 5.20 — REAL PROPERTY TRANSFER TAX

Note: Prior ordinance history: Ords. 566, 570, 857, 887 and 994.

The ordinance codified in this chapter shall be known as the "real property transfer tax ordinance of the County of Merced." It is adopted pursuant to Part 6.7 (commencing with Section 11901) of Division 2 of the Revenue and Taxation Code.

(Ord. 1929 § 1, 2015)

There is imposed on each deed, instrument or writing by which any lands, tenements, or other realty sold within the county shall be granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or purchasers or any other person or persons by his, her, or their direction when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrances remaining thereon at the time of sale) exceeds $100, a tax at the rate of fifty-five cents ($0.55) for each $500 or fractional part thereof. (Ord. 1929 § 1, 2015)

The tax imposed by Section 5.20.020 shall be paid by any person who makes, signs, or issues any document or instrument subject to the tax, or for whose use or benefit the same is made, signed, or issued.

(Ord. 1929 § 1, 2015)

The tax imposed pursuant to this chapter shall not apply to any instrument in writing given to secure a debt.

(Ord. 1929 § 1, 2015)

Any deed, instrument, or writing to which the United States or any agency or instrumentality thereof, any state or territory, or political subdivision thereof is a party shall be exempt from any tax imposed pursuant to this part when the exempt agency is acquiring title. (Ord. 1929 § 1, 2015)

The tax imposed pursuant to this chapter shall not apply to the making, delivering or filing of conveyances to make effective any plan of reorganization or adjustment:

• A. Confirmed under the Federal Bankruptcy Act, as amended;

• B. Approved in an equity receivership proceeding in a court involving a railroad corporation, as defined in subdivision (m) of Section 205 of Title 11 of the United States Code, as amended;

• C. Approved in an equity receivership proceeding in a court involving a corporation, as defined in subdivision (3) of Section 506 of Title 11 of the United States Code, as amended; or

• D. Whereby a mere change in identity, form or place of organization is effected.

Subsections A to D, inclusive, shall only apply if the making, delivery of filing of instruments of transfer or conveyances occurs within five years from the date of such confirmation, approval or change.

(Ord. 1929 § 1, 2015)

Any tax imposed pursuant to this chapter shall not apply with respect to any deed, instrument, or writing to a beneficiary or mortgagee, which is taken from the mortgagor or trustor as a result of or in lieu of foreclosure, provided, that such tax shall apply to the extent that the consideration exceeds the unpaid debt, including accrued interest and cost of foreclosure. Consideration, unpaid debt amount and identification of grantee as beneficiary or mortgagee shall be noted on said deed, instrument or writing or stated in an affidavit or declaration under penalty of perjury for tax purposes.

(Ord. 1929 § 1, 2015)

• A. In the case of any realty held by a partnership or other entity treated as a partnership for federal income tax purposes, no levy shall be imposed pursuant to this part by reason of any transfer of an interest in the partnership or other entity or otherwise, if both of the following occur:

  1. Such partnership (or other partnership) is considered a continuing partnership within the meaning of Section 708 of the Internal Revenue Code of 1986; and

  2. Such continuing partnership continues to hold the realty concerned.

• B. If there is a termination of any partnership within the meaning of Section708 of the Internal Revenue Code of 1986, for purposes of this part, the partnership or other entity shall be treated as having executed an instrument whereby there was conveyed, for fair market value (exclusive of the value of any lien or encumbrance remaining thereon), all realty held by such partnership at the time of the termination.

• C. Not more than one tax shall be imposed pursuant to this chapter by reason of a termination described in subsection B of this section, and any transfer pursuant thereto, with respect to the realty held by such partnership at the time of the termination.

• D. No levy shall be imposed pursuant to this section by reason of any transfer between an individual or individuals and a legal entity or between legal entities that results solely in a change in method of holding title to the realty and in which proportional ownerships interests in realty, whether represented by stock, membership interest, partnership interest, co-tenancy interest, or otherwise directly or indirectly, remain the same immediately after the transfer.

(Ord. 1929 § 1, 2015)

• A. The tax imposed pursuant to this chapter shall not apply to any deed, instrument or writing which transfers, divides or allocates community, quasi-community or quasi-marital property assets between spouses for purposes of effecting a division of the same, which is required by a judgment decreeing a dissolution or legal separation, by a judgment of nullity or by any other judgment or order rendered pursuant to the Family Code, or by a written agreement between the spouses, executed in contemplation of such judgment or order, whether or not it is incorporated in the judgment or order.

• B. The deed, instrument or writing shall include a written recital, signed by either spouse, stating that it is entitled to the exemption.

• (Ord. 1929 § 1, 2015)

The tax imposed pursuant to this chapter shall not apply with respect to any deed, instrument or other writing by which realty is conveyed by the state of California, any political subdivision thereof, or agency or instrumentality of either thereof, pursuant to an agreement whereby the purchaser agrees to immediately reconvey the realty to the exempt agency. (Ord. 1929 § 1, 2015)

The tax imposed pursuant to this chapter shall not apply with respect to any deed, instrument or other writing by which the state of California, any political subdivision thereof, or agency or instrumentality of either thereof, conveys to a nonprofit corporation realty, the acquisition, construction or improvement of which was financed or refinanced by obligations issued by the nonprofit corporation on behalf of a government unit, within the meaning of Section 1.103-1(b) of Title 26 of the Code of Federal Regulations. (Ord. 1929 § 1, 2015)

Except as otherwise provided by law, every person who records a deed, instrument or writing which he or she claims is exempt from the tax imposed pursuant to this chapter shall declare in writing, under penalty of perjury, in the manner and form prescribed by the recorder, the reason why it is exempt under the law.

(Ord. 1929 § 1, 2015)

If the legislative body of any city in the county imposes a tax pursuant to Part 6.7 of Division 2 of the Revenue and Taxation Code equal to one-half the amount specified in Section 5.20.020, a credit shall be granted against the taxes due under this chapter in the amount of the city's tax. (Ord. 1929 § 1, 2015)

• A. The county recorder shall administer this chapter and shall also administer any ordinance adopted by any city in the county pursuant to Part 6.7 (commencing with Section 11901) of Division 2 of the Revenue and Taxation Code imposing a tax for which a credit is allowed by this chapter.

• B. On or before the fifteenth (15th) day of the month the recorder shall report to the county auditor the amounts of taxes collected during the preceding month pursuant to this chapter and each such city ordinance.

• C. The auditor shall allocate and distribute quarterly such taxes, as follows:

  1. All moneys which relate to transfers of real property located in the unincorporated territory of the county shall be allocated to the county.

  2. All moneys which relate to transfer of real property located in a city in the county which imposes a tax pursuant to said Part 6.7 shall be allocated one-half to such city and one-half to the county.

  3. All money which relates to transfers of real property located in a city which imposes a tax on transfers of real property not in conformity with Part 6.7 shall be collected and allocated entirely to the county.

4. All moneys which relate to transfer of real property in a city in the county which does not impose a tax on transfer of real property shall be allocated to the county.

(Ord. 1929 § 1, 2015)

• A. The recorder shall not record any deed, instrument or writing subject to the tax imposed pursuant to this chapter, unless the tax is paid at the time of recording. A declaration of the amount of tax due, signed by the party determining the tax or his or her agent, shall appear on the face of the document in compliance with Revenue and Taxation Code Section 11932, and the recorder may rely thereon; provided he or she has no reason to believe that the full amount of the tax due has not been paid. The declaration shall include a statement that the consideration or value on which the tax due was computed was, or that it was not, exclusive of the value of a lien or encumbrance remaining on the interest or property conveyed at the time of sale.

• B. Every document subject to tax under this chapter which is submitted for recordation shall show on the face of the document the location of the lands, tenements or other realty described in the document. If the lands, tenements or other realty are located within a city in the county, the name of the city shall be set forth. If the lands, tenements or other realty are located in the unincorporated area of the county, that fact shall be set forth.

• (Ord. 1929 § 1, 2015)

Claims for refunds of taxes imposed pursuant to this chapter shall be governed by the provisions of Chapter 5 (commencing with Section 5096) of Part 9 of Division 1 of the Revenue and Taxation Code.

• (Ord. 1929 § 1, 2015)

Whenever the county recorder has reason to believe that the full amount of tax due under this chapter has not been paid, the recorder may, by notice serviced upon any person liable therefor, require him or her to furnish a true copy of his or her records relevant to the amount of the consideration or value of the interest or property conveyed. (Ord. 1929 § 1, 2015)

Any person who submits or causes to be submitted for recordation any deed, instrument or writing subject to the tax imposed by this chapter, and makes any material misrepresentation of fact for the purpose of avoiding all or any part of the tax imposed by this code shall be guilty of a misdemeanor and subject to the penalties set forth in Section 1.28.020. (Ord. 1929 § 1, 2015)

• A. Each deed, instrument, or writing by which lands, tenements, or other realty is sold, granted, assigned, transferred, or otherwise conveyed, shall have noted upon it the tax roll parcel number. The number will be used only for administrative and procedural purposes and will not be proof of title and in the event of any conflicts, the stated legal description noted upon the document shall govern.

• B. The validity of such a document shall not be affected by the fact that such parcel number is erroneous or omitted, and there shall be no liability attaching to any person for an error in such number or for omission of such number.

• C. A parcel which has been created by the division of an existing parcel and which at the time of recording has no separate parcel number shall have noted upon it the words "portion of" and the parcel number of the parcel from which it was created.

• D. The recorder shall not record any deed, instrument, or writing subject to the provisions of this section unless the tax roll parcel number has been noted upon it.

• (Ord. 1929 § 1, 2015)