B-164146, JUNE 3, 1968, 47 COMP. GEN. 704

B-164146: Jun 3, 1968

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A-56 FOR THE REIMBURSEMENT OF TRANSFER TAXES IS SUBJECT TO THE CONDITION THAT THE SAME TYPES OF COSTS ARE NOT REIMBURSABLE AT BOTH STATIONS. 1968: FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 23. THE EMPLOYEE IS ENTITLED TO REIMBURSEMENT OF THE EXPENSES HE INCURRED IN THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL STATION AND IN THE PURCHASE OF A RESIDENCE AT HIS NEW OFFICIAL STATION UNDER 5 U.S.C. 5724A (A) AND SECTION 4 OF BUREAU OF THE BUDGET CIRCULAR NO. WHICH IS IMPOSED ON THE TRANSFER OF REAL PROPERTY AND THE SIMILAR 1 PERCENT TAX WHICH IS IMPOSED BY LOCAL GOVERNMENTS IN THE STATE OF PENNSYLVANIA. BOTH STATE AND LOCAL TRANSFER TAXES WERE CHARGED. WAS IN EACH CASE SPLIT BETWEEN THE BUYER AND SELLER IN ACCORDANCE WITH THE CUSTOM OF THE AREAS IN WHICH THE RESIDENCES WERE SOLD AND PURCHASED.

B-164146, JUNE 3, 1968, 47 COMP. GEN. 704

OFFICERS AND EMPLOYEES - TRANSFERS - RELOCATION EXPENSES - TAXES AN EMPLOYEE TRANSFERRED BETWEEN COUNTIES IN THE STATE OF PENNSYLVANIA WHO INCURS THE EXPENSE OF STATE AND COUNTY REAL PROPERTY TRANSFER TAXES IN CONNECTION WITH THE SALE AND PURCHASE OF RESIDENCES AT HIS OLD AND NEW OFFICIAL STATIONS MAY ONLY BE REIMBURSED THE AMOUNT OF THE HIGHER EXPENSE AS THE AUTHORITY IN SECTION 4.2D OF THE BUREAU OF THE BUDGET CIRCULAR NO. A-56 FOR THE REIMBURSEMENT OF TRANSFER TAXES IS SUBJECT TO THE CONDITION THAT THE SAME TYPES OF COSTS ARE NOT REIMBURSABLE AT BOTH STATIONS. EVEN IF THE EMPLOYEE HAD PAID A STATE TRANSFER TAX INCIDENT TO ONE TRANSACTION AND A LOCAL TRANSFER TAX IN CONNECTION WITH THE OTHER, THE "SAME TYPES OF COSTS" PRINCIPLE WOULD PREVENT REIMBURSEMENT OF BOTH EXPENSES.

TO THE CHAIRMAN, UNITED STATES CIVIL SERVICE COMMISSION, JUNE 3, 1968:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF APRIL 23, 1968, CONCERNING THE PROPRIETY OF REIMBURSING A TRANSFERRED EMPLOYEE OF THE CIVIL SERVICE COMMISSION THE EXPENSES HE INCURRED FOR STATE AND COUNTY REAL PROPERTY TRANSFER TAXES IN CONNECTION WITH HIS SALE AND PURCHASE OF RESIDENCES AT HIS OLD AND NEW OFFICIAL STATIONS.

THE CASE PRESENTED FOR OUR CONSIDERATION INVOLVES AN EMPLOYEE WHO MOVED FROM HARRISBURG TO VILLANOVA, PENNSYLVANIA, INCIDENT TO A TRANSFER OF OFFICIAL STATION. IN CONNECTION WITH THAT TRANSFER, THE EMPLOYEE IS ENTITLED TO REIMBURSEMENT OF THE EXPENSES HE INCURRED IN THE SALE OF HIS RESIDENCE AT HIS OLD OFFICIAL STATION AND IN THE PURCHASE OF A RESIDENCE AT HIS NEW OFFICIAL STATION UNDER 5 U.S.C. 5724A (A) AND SECTION 4 OF BUREAU OF THE BUDGET CIRCULAR NO. A-56. THE ITEMS OF EXPENSE IN QUESTION INVOLVE THE PENNSYLVANIA STATE TAX, AMOUNTING TO 1 PERCENT OF THE PURCHASE PRICE, WHICH IS IMPOSED ON THE TRANSFER OF REAL PROPERTY AND THE SIMILAR 1 PERCENT TAX WHICH IS IMPOSED BY LOCAL GOVERNMENTS IN THE STATE OF PENNSYLVANIA.

IN THE LOCALITIES WHERE THE EMPLOYEE SOLD AND PURCHASED RESIDENCES, BOTH STATE AND LOCAL TRANSFER TAXES WERE CHARGED. THE TOTAL TRANSFER TAX, AMOUNTING TO 2 PERCENT OF THE PURCHASE PRICE, WAS IN EACH CASE SPLIT BETWEEN THE BUYER AND SELLER IN ACCORDANCE WITH THE CUSTOM OF THE AREAS IN WHICH THE RESIDENCES WERE SOLD AND PURCHASED. THUS, THE EMPLOYEE WAS REQUIRED TO PAY 1 PERCENT OF THE SALES PRICE OF EACH RESIDENCE TO COVER STATE AND LOCAL TRANSFER TAXES.

SECTION 4.2D OF CIRCULAR NO. A-56 SPECIFICALLY AUTHORIZES REIMBURSEMENT OF EXPENSES INCURRED FOR TRANSFER TAXES; HOWEVER, REIMBURSEMENT OF THAT EXPENSE IS SUBJECT TO THE CONDITION THAT THE SAME TYPES OF COSTS ARE NOT REIMBURSABLE AT BOTH LOCALITIES, I.E., OLD AND NEW OFFICIAL STATIONS. SINCE THE EMPLOYEE PAID ONE-HALF OF THE TOTAL STATE AND LOCAL TRANSFER TAXES IN CONNECTION WITH REAL ESTATE TRANSACTIONS BOTH AT THE OLD AND AT THE NEW OFFICIAL STATIONS, HE IS ENTITLED TO REIMBURSEMENT IN THE AMOUNT OF THE HIGHER EXPENSE ONLY. FURTHER, EVEN IF THE EMPLOYEE HAD PAID A STATE TRANSFER TAX INCIDENT TO ONE TRANSACTION AND A LOCAL (COUNTY OR CITY) TRANSFER TAX IN CONNECTION WITH THE OTHER TRANSACTION, WE BELIEVE THAT THE PROVISION PROHIBITING REIMBURSEMENT OF THE SAME TYPES OF COSTS AT BOTH LOCALITIES WOULD PREVENT REIMBURSEMENT OF BOTH OF THOSE EXPENSES. THE DIFFERENCE BETWEEN THE STATE AND THE LOCAL TAX ON THE SAME TRANSACTION IS NOT SUFFICIENT TO JUSTIFY A HOLDING THAT THEY ARE NOT THE SAME TYPES OF COSTS.

FOR THE REASONS STATED THE EMPLOYEE CONCERNED MAY BE REIMBURSED ONLY THE LARGER OF THE TWO AMOUNTS HE PAID FOR STATE AND LOCAL TRANSFER TAXES IN CONNECTION WITH HIS SALE AND PURCHASE OF RESIDENCES AT HIS OLD AND NEW OFFICIAL STATIONS.