B-163425, FEB. 29, 1968

B-163425, FEB. 29, 1968

EMPLOYEES - TRANSFERS - PUBLIC LAW 89-516 - HOME SALE/PURCHASE EXPENSES TAXES DECISION TO CSC AS TO PROPRIETY OF REIMBURSING AN EMPLOYEE FOR COUNTY PROPERTY SALES TAXES AND TRANSFER TAX INCIDENT TO SALE AND PURCHASE OF RESIDENCES ON TRANSFER FROM WASHINGTON TO MARYLAND. AN EMPLOYEE WHO HAD TO PAY A COUNTY REAL PROPERTY TAX INCIDENT TO SALE OF RESIDENCE AT FORMER DUTY STATION AND A REAL PROPERTY TRANSFER TAX INCIDENT TO PURCHASE OF RESIDENCE AT NEW STATION MUST HAVE SUCH TAXES REGARDED AS THE SAME TYPE OF COST WITHIN THE MEANING OF SEC. 4.2D OF BOB CIR. A-56 WHICH PRECLUDES PAYMENTS FOR THE SAME TYPE OF COST AT BOTH THE OLD AND THE NEW DUTY STATIONS. THEREFORE THE EMPLOYEE MAY BE REIMBURSED FOR ONLY ONE TAX, THE HIGHER OF THE TWO.

TO MR. MACY:

WE REFER TO YOUR LETTER OF JANUARY 24, 1968, BY WHICH YOU REQUEST OUR DECISION WHETHER, UNDER THE PROVISIONS OF 5 U.S.C. 5724A (A) (4), AN EMPLOYEE OF THE CIVIL SERVICE COMMISSION MAY BE REIMBURSED THE AMOUNT HE PAID FOR COUNTY REAL PROPERTY SALES TAX AT HIS OLD OFFICIAL STATION AND THE AMOUNT HE PAID FOR COUNTY REAL PROPERTY TRANSFER TAX AT HIS NEW OFFICIAL STATION IN CONNECTION WITH HIS SALE AND PURCHASE OF RESIDENCES INCIDENT TO AN OFFICIAL TRANSFER.

YOU QUESTION WHETHER THE EMPLOYEE MAY BE REIMBURSED BOTH OF THE TAXES INVOLVED IN VIEW OF THE PROVISION OF SECTION 4.2D OF THE IMPLEMENTING REGULATION, BUREAU OF THE BUDGET CIRCULAR NO. A-56, WHICH IS IN PERTINENT PART AS FOLLOWS:

"* * * FEES FOR LOAN APPLICATIONS, LENDER'S LOAN ORIGINATION, CREDIT REPORTS, MORTGAGE AND TRANSFER TAXES, STATE AND FEDERAL REVENUE STAMPS, AND SIMILAR FEES AND CHARGES, ARE REIMBURSABLE TO THE EXTENT SUCH COSTS ARE CUSTOMARILY PAID BY THE SELLER AT THE LOCATION OF THE OLD OFFICIAL STATION OR BY THE PURCHASER AT THE LOCATION OF THE NEW OFFICIAL STATION, BUT THE SAME TYPES OF COSTS ARE NOT REIMBURSABLE AT BOTH LOCATIONS. * *

YOU HAVE ASCERTAINED THAT A COUNTY REAL PROPERTY SALES TAX IS CUSTOMARILY PAID BY THE SELLER AT THE LOCATION OF THE EMPLOYEE'S FORMER RESIDENCE IN THE STATE OF WASHINGTON AND THAT A COUNTY REAL PROPERTY TRANSFER TAX IS CUSTOMARILY PAID BY THE PURCHASER AT THE LOCATION OF HIS RESIDENCE IN THE STATE OF MARYLAND.

SECTION 28.45.050 OF THE REVISED CODE OF WASHINGTON PROVIDES:

"LEVY OF TAX--- RATE--- DISPOSITION OF PROCEEDS. THE COUNTY COMMISSIONERS OF ANY COUNTY ARE AUTHORIZED BY ORDINANCE TO LEVY AN EXCISE TAX UPON SALES OF REAL ESTATE NOT EXCEEDING ONE PERCENT OF THE SELLING PRICE. THE RATE OF THE LEVY SHALL BE DETERMINED ANNUALLY BY THE COMMISSIONERS. THE PROCEEDS OF THE TAX PROVIDED FOR IN THIS CHAPTER SHALL BE PLACED IN THE COUNTY SCHOOL FUND AND SHALL BE USED EXCLUSIVELY FOR THE SUPPORT OF THE COMMON SCHOOLS: PROVIDED, THAT ONE PERCENT OF THE PROCEEDS OF THE TAX PROVIDED FOR HEREIN MAY BE PLACED IN THE CURRENT EXPENSE FUND OF THE COUNTY.'

WE WERE INFORMALLY ADVISED THAT CHAPTER 180 OF THE LAWS OF MARYLAND, 1961, AUTHORIZED MONTGOMERY COUNTY, THE LOCALITY IN WHICH THE EMPLOYEE PURCHASED A RESIDENCE, TO IMPOSE A TAX ON THE TRANSFER OF REAL PROPERTY OF NOT TO EXCEED 1 PERCENT OF THE VALUE OF THE CONSIDERATION FOR SUCH TRANSFER. WE WERE ALSO ADVISED THAT THE MONTGOMERY COUNTY COUNCIL HAS IMPLEMENTED THAT TAXING AUTHORITY BY AN ORDINANCE WHICH PROVIDES FOR THE IMPOSITION OF A SLIDING SCALE TAX ON REAL ESTATE TRANSFERS.

ALTHOUGH THE LAWS IMPOSING THE TAXES HERE INVOLVED ARE NOT PHRASED IN EXACTLY THE SAME MANNER WE MUST CONCLUDE THAT THEY ARE THE SAME TYPE OF COST WITHIN THE MEANING OF SECTION 4.2D, CIRCULAR NO. A-56.

THEREFORE, THE EMPLOYEE SHOULD BE REIMBURSED FOR ONLY ONE OF THE TAXES IN QUESTION, NAMELY, THE STATE OF WASHINGTON TAX OF $250 WHICH IS THE HIGHER OF THE TWO.