Sacramento Municipal Code Ch. 3.16 Additional Real Property Transfer Tax

The tax imposed under this chapter is solely for the purpose of raising income and revenue which is necessary to pay the usual and current expenses of conducting the municipal government of the city. (Prior code § 41.09.127)

There is imposed a tax on all transfers by deeds, instruments, writings or any other document by which any lands, tenements or other interests in real property sold, located in the city, are or is granted, assigned, transferred or otherwise conveyed to or vested in a purchaser, or purchasers thereof, or any other person or persons, by his or their direction. Said tax shall be levied at the rate of .00275 of the value of consideration. (Prior code § 41.09.128)

As used in this chapter, the following definitions apply:

"Director" means the city's director of finance or designee.

"Real property" and "realty" mean "real property" as defined by and under the laws of the state of California.

"Value of consideration" means the total consideration, valued in money of the United States, paid or delivered, or contracted to be paid or delivered in return for the transfer of real property, including the amount of any indebtedness existing immediately prior to the transfer which is secured by a lien, deed of trust or other encumbrance on the property conveyed and which continues to be secured by such lien, deed of trust or encumbrance after said transfer, and also including the amount of any indebtedness which is secured by a lien, deed of trust or encumbrance given or placed upon the property in connection with the transfer to secure the payment of the purchase price or any part thereof which remains unpaid at the time of transfer.

"Value of consideration" also includes the amount of any special assessment levied or imposed upon the property by a public body, district or agency, where said special assessment is a lien or encumbrance on the property and the purchaser or transferee agrees to pay such special assessment or takes the property subject to the lien of such special assessment. The value of any lien or encumbrance of a type other than those which are hereinabove specifically included, existing immediately prior to the transfer and remaining after said transfer, shall not be included in determining the value of the consideration. If the "value of the consideration" cannot be definitely determined, or is left open to be fixed by future contingencies, "value of the consideration" shall be deemed to mean the fair market value of the property at the time of transfer, after deducting the amount of any lien or encumbrance, if any, of a type which would be excluded in determining the "value of the consideration" pursuant to the above provisions of this section. (Ord. 2018-0048 § 1; prior code § 41.09.129)

Any persons who make a transfer which is subject to the tax imposed under Section 3.16.020 of this chapter, and any persons to whom such a transfer is made, shall be jointly and severally liable for payment of the tax imposed under said Section 3.16.020 of this chapter, provided, however, that the United States, state of California, any city, county, city and county, district or any other political subdivision of the state of California shall be exempt from any liability for the tax imposed herein. (Prior code § 41.09.130)

The tax imposed by Section 3.16.020 of this chapter shall not apply to:

A. Any transfer made solely to secure a debt; provided, however, that nothing herein contained shall be deemed to exclude the amount of any such indebtedness from being included in the "value of consideration," pursuant to Section 3.16.020 of this chapter in connection with transfers which are not made solely to secure a debt;

B. Transfers to make effective any plan of corporate reorganization or adjustment:

1. Confirmed under the Bankruptcy Act, as amended,

2. Approved in an equity receivership proceeding in court involving a railroad corporation as defined in Section 77(m) of the Bankruptcy Act, as amended,

3. Approved in an equity receivership proceeding in a court involving a corporation as defined in Section 106(3) of the Bankruptcy Act, as amended;

C. Any transfer of property from one spouse to the other in accordance with the terms of a decree of dissolution or in fulfillment of a property settlement incident thereto; provided, however, that such property was acquired by the husband and wife or husband or wife prior to the final decree of dissolution;

D. Transfer or transfers, conveyance, lease or sublease without consideration which confirm or correct a deed previously recorded or filed;

E. Transfer to or between the United States, state of California, any city, county, city and county, district or any other political subdivision of the state of California and transfer executed pursuant to eminent domain proceedings by the United States, state of California, any city, county, city and county, district or other political subdivision of the state of California;

F. Transfers made pursuant to any order by the court in any mortgage or lien foreclosure proceeding or upon execution of a judgment, or a transfer in lieu of foreclosure;

G. Transfers recorded prior to the effective date of this chapter;

H. 1. In the case of real property held by a partnership, the tax imposed shall not apply by reason of any transfer of an interest in a partnership or otherwise, if:

a. Such partnership is considered as a continuing partnership within the meaning of Section 708 of the Internal Revenue Code of 1954, and

b. Such continuing partnership continues to hold the real property concerned,

2. If there is a termination of any partnership within the meaning of Section 708 of the Internal Revenue Code of 1954, for purposes of this chapter, such partnership shall be treated as having executed an instrument whereby there was transferred, for fair market value, all realty held by such partnership at the time of such termination,

3. Not more than one tax shall be imposed pursuant to this chapter by termination described in subsection (H)(2) of this section, and any transfer pursuant thereto, with respect to the real property held by such partnership at the time of such termination,

a. The making or delivery of conveyance to make effective any order of the Securities and Exchange Commission, as defined in subdivision (a) of Section 1083 of the Internal Revenue Code of 1954, but only if:

i. The order of the Securities and Exchange Commission, in obedience to which such conveyance is made, recites that such conveyance is necessary or appropriate to effectuate the provisions of Section 79K of Title 15 of the United States Code, relating to the Public Utility Holding Company Act of 1935,

ii. Such order specifies the property which is ordered to be conveyed,

iii. Such conveyance is made in obedience to such order. (Prior code § 41.09.131)

The director of finance (hereinafter in this chapter referred to as "director") shall collect the tax imposed under this chapter and shall otherwise administer this chapter. He or she may make such rules and regulations, not inconsistent with this chapter, as he or she may deem reasonably necessary or desirable to administer this chapter as well as necessary forms and receipts. (Prior code § 41.09.132)

A. The tax imposed under this chapter is due and payable at the time the deed, instrument or writing effecting a transfer subject to the tax is delivered, and is delinquent if unpaid forty-five (45) days after the recordation thereof. In the event that the tax is not paid prior to becoming delinquent, a delinquency penalty of ten (10) percent of the amount of tax due shall accrue. In the event a portion of the tax is unpaid prior to becoming delinquent, the penalty shall only accrue as to the portion remaining unpaid. An additional penalty of ten (10) percent shall accrue if the tax remains unpaid on the ninetieth day following the date of recordation. Interest shall accrue at the rate of one-half of one percent a month, or fraction thereof, on the amount of tax, exclusive of penalties, from the date the tax becomes delinquent to the date of payment. Interest and penalty accrued shall become part of the tax.

B. Notwithstanding anything to the contrary in subsection A of this section, the director shall have the authority to waive the penalty and interest provisions in subsection A of this section where he or she determines that the administrative costs involved in collecting said penalties and interest exceeds the amount of penalties and interest which can reasonably be expected to be collected. Nothing contained in this subsection shall authorize the director to waive any penalty in excess of five hundred dollars ($500.00) or interest in excess of five hundred dollars ($500.00) on any single transfer. (Prior code § 41.09.133)

The tax imposed by this chapter shall be paid to the director by the persons referred to in Section 3.16.040 of this chapter. The director shall have the authority as part of any rules and regulations promulgated by him or her as provided for herein to require that the payment shall be accompanied by a declaration of the amount of tax due signed by the person paying the tax or by his or her agent. The declaration shall include a statement that the value of the consideration on which the tax due was computed includes all indebtedness secured by liens, deeds of trust, or other encumbrances remaining or placed on the property transferred at the time of transfer, and also includes all special assessments on the property which the purchaser or transferee agrees to pay or which remains a lien on the property at the time of transfer. The declaration shall identify the deed, instrument or writing effecting the transfer for which the tax is being paid. The director may require delivery to him or her of a copy of such deed, instrument or writing whenever he or she deems such to be reasonably necessary to adequately identify such writing or to administer the provisions of this chapter. The director may rely on the declaration as to the amount of the tax due provided he or she has no reason to believe that the full amount of the tax due is not shown on the declaration.

Whenever the director has reason to believe that the full amount of tax due is not shown on the declaration or has not been paid, he or she may, by notice served upon any person liable for the tax, require him or her to furnish a true copy of his or her records relevant to the value of the consideration or fair market value of the property transferred. Such notice may be served at any time within three years after recordation of the deed, instrument or writing which transfers such property. (Prior code § 41.09.134)

If on the basis of such information as the director receives pursuant to the last paragraph of Section 3.16.080 of this chapter and/or on the basis of such other relevant information that comes into his possession, he or she determines that the amount of tax due as set forth in the declaration, or as paid, is insufficient, he or she may recompute the tax due on the basis of such information.

If the declaration required by Section 3.16.080 of this chapter is not submitted the director may make an estimate of the value of the consideration for the property conveyed and determine the amount of tax to be paid on the basis of any information in his or her possession or that may come into his or her possession.

One or more deficiency determinations may be made of the amount due with respect to any transfer. (Prior code § 41.09.135)

The director shall give written notice to a person liable for payment of the tax imposed under this chapter of his or her determination made under Section 3.16.090 of this chapter. Such notice shall be given within three years after the recordation of the deed, instrument or writing effecting the transfer on which the tax deficiency determination was made. (Prior code § 41.09.136)

Any notice required to be given by the director under this chapter may be served personally or by mail; if by mail, service shall be made by depositing the notice in the United States mail, in a sealed envelope with postage prepaid, addressed to the person on whom it is to be served at his or her address as it appears in the records of the city or as ascertained by the director. The service is complete at the time of the deposit of the notice in the United States mail, without extension of time for any reason. (Prior code § 41.09.137)

Any person against whom a determination is made under this chapter or any person directly interested may petition the director for a redetermination within sixty (60) days after service upon the person of notice thereof. If a petition for redetermination is not filed in writing with the director, City Hall, 915 I Street, Sacramento, California 95814, within the sixty (60) day period, the determination becomes final at the expiration of the period. (Prior code § 41.09.138)

If a petition for redetermination is filed within the sixty (60) day period, the director shall reconsider the determination and, if the person has so requested in his or her petition, shall grant the person an oral hearing, and shall give him or her ten (10) days' notice of the time and place of hearing. The director may designate one or more deputies for the purpose of conducting hearings and may continue a hearing from time to time as may be necessary. (Prior code § 41.09.139)

The director may decrease or increase the amount of the determination before it becomes final, but the amount may be increased only if a claim for the increase is asserted by the director at or before the hearing. (Prior code § 41.09.140)

The order or decision of the director upon a petition for redetermination becomes final thirty (30) days after service upon the petitioner of notice thereof. (Prior code § 41.09.141)

The amount of any tax, penalty, and interest imposed under the provisions of this chapter shall be deemed a debt to the city. Any person owing money to the city under the provisions of this chapter shall be liable to an action brought in the name of the city for the recovery of such amount. (Prior code § 41.09.142)

The director may refund an overpayment of any tax, penalty, or interest under this chapter, if:

A. A claim is filed in accordance with section 3.04.070 within one year of the date of the overpayment and the director determines that the claimant is entitled to the refund; or

B. Within one year of the date of the overpayment, the director, in their sole discretion, determines that the payer is entitled to a refund. (Ord. 2018-0048 § 2; Ord. 2010-036 § 4; prior code § 41.09.143)

A credit against the tax imposed pursuant to Section 3.16.020 of this chapter shall be allowed for any tax paid pursuant to Section 3.12.020 of this title. (Prior code § 41.09.144)