B-178873, APR 22, 1974

B-178873: Apr 22, 1974

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DIGEST: IN VIEW OF ADDITIONAL EVIDENCE SUBMITTED BY EMPLOYEE INDICATING THAT IT IS CUSTOMARY FOR PURCHASER OF RESIDENCE IN ATLANTA AREA TO PAY GEORGIA INTANGIBLE TAX AS CLOSING COST AT LEAST WITH RESPECT TO CONVENTIONAL LOAN AND VA LOAN TRANSACTIONS AND FACT THAT EVIDENCE CONSIDERED IN PRIOR DECISION RELATED ONLY TO FHA GUARANTEED LOANS WHICH IS NOT INVOLVED IN PRESENT CASE. RECONSIDERATION OF DECISION DENYING REIMBURSEMENT FOR GEORGIA INTANGIBLE TAX: THIS ACTION IS A RECONSIDERATION OF DECISION B-178873 DATED AUGUST 27. BOWLES WAS TRANSFERRED FROM CAPE KENNEDY. IN CONNECTION WITH THIS PURCHASE HE WAS REQUIRED TO PAY THE GEORGIA INTANGIBLE TAX. CONCLUDED THAT THE GEORGIA INTANGIBLE TAX IS A REIMBURSABLE REAL ESTATE EXPENSE UNDER SECTION 4.2D OF OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO.

B-178873, APR 22, 1974

DIGEST: IN VIEW OF ADDITIONAL EVIDENCE SUBMITTED BY EMPLOYEE INDICATING THAT IT IS CUSTOMARY FOR PURCHASER OF RESIDENCE IN ATLANTA AREA TO PAY GEORGIA INTANGIBLE TAX AS CLOSING COST AT LEAST WITH RESPECT TO CONVENTIONAL LOAN AND VA LOAN TRANSACTIONS AND FACT THAT EVIDENCE CONSIDERED IN PRIOR DECISION RELATED ONLY TO FHA GUARANTEED LOANS WHICH IS NOT INVOLVED IN PRESENT CASE, EMPLOYEE MAY BE REIMBURSED FOR INTANGIBLE TAX PAID BY HIM AS CLOSING COST IN CONNECTION WITH PURCHASE OF RESIDENCE IN ATLANTA INCIDENT TO HIS TRANSFER.

RECONSIDERATION OF DECISION DENYING REIMBURSEMENT FOR GEORGIA INTANGIBLE TAX:

THIS ACTION IS A RECONSIDERATION OF DECISION B-178873 DATED AUGUST 27, 1973, DISALLOWING THE CLAIM OF MR. BILLY C. BOWLES, AN EMPLOYEE OF THE GENERAL ACCOUNTING OFFICE, FOR REIMBURSEMENT FOR THE GEORGIA STATE INTANGIBLE TAX PAID BY HIM IN CONNECTION WITH THE PURCHASE OF A RESIDENCE INCIDENT TO HIS TRANSFER.

THE RECORD IN THE DECISION OF AUGUST 27, 1973, INDICATED THAT MR. BOWLES WAS TRANSFERRED FROM CAPE KENNEDY, FLORIDA, TO ATLANTA, GEORGIA, EFFECTIVE AUGUST 10, 1970. INCIDENT TO THIS TRANSFER, HE PURCHASED A RESIDENCE IN DECATUR, GEORGIA, AND IN CONNECTION WITH THIS PURCHASE HE WAS REQUIRED TO PAY THE GEORGIA INTANGIBLE TAX. THE DECISION OF AUGUST 27, 1973, CONCLUDED THAT THE GEORGIA INTANGIBLE TAX IS A REIMBURSABLE REAL ESTATE EXPENSE UNDER SECTION 4.2D OF OFFICE OF MANAGEMENT AND BUDGET (OMB) CIRCULAR NO. A-56, REVISED JUNE 26, 1969, IN FORCE AT THE TIME. THAT DECISION DID NOT, HOWEVER, AUTHORIZE REIMBURSEMENT FOR THE INTANGIBLE TAX PAID BY MR. BOWLES BECAUSE OF DOUBT AS TO WHETHER PAYMENT WAS PROPER IN VIEW OF THE REQUIREMENT OF SECTION 4.2D THAT COSTS OF THE TYPE INVOLVED MAY BE REIMBURSED ONLY IF THEY ARE CUSTOMARILY PAID BY THE PURCHASER OR SELLER AS THE CASE MAY BE IN THE LOCATION WHERE THE TRANSACTION TOOK PLACE. IN THIS REGARD MR. BOWLES HAS REQUESTED RECONSIDERATION OF THE DECISION OF AUGUST 27, 1973, ON THE BASIS OF ADDITIONAL EVIDENCE SUBMITTED BY HIM INDICATING THAT IT IS CUSTOMARY FOR THE PURCHASER OF A RESIDENCE TO PAY THE INTANGIBLE TAX IN THE ATLANTA AREA.

THE CONCLUSION IN THE DECISION OF AUGUST 27, 1973, THAT THE INTANGIBLE TAX IS NOT REIMBURSABLE TO THE PURCHASER OF A RESIDENCE IN THE ATLANTA AREA WAS BASED ON INFORMATION SUPPLIED BY THE ATLANTA AREA OFFICE OF THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT INDICATING THAT THE INTANGIBLE TAX IS AN EXPENSE CUSTOMARILY PAID BY THE SELLER IN THAT AREA. SUBSEQUENTLY, THIS OFFICE WAS INFORMALLY ADVISED THAT THIS INFORMATION RELATED ONLY TO THE CUSTOMS FOLLOWED IN THE ATLANTA AREA IN CONNECTION WITH REAL ESTATE TRANSACTIONS INVOLVING LOANS GUARANTEED BY THE FEDERAL HOUSING ADMINISTRATION (FHA) AND NOT NECESSARILY TRANSACTIONS INVOLVING CONVENTIONAL FINANCING OR VETERANS ADMINISTRATION (VA) GUARANTEED LOANS. ACCORDINGLY, SINCE THE PRESENT CASE DOES NOT INVOLVE AN FHA GUARANTEED LOAN, THE INFORMATION SUPPLIED BY THE ATLANTA AREA OFFICE WOULD NOT BE CONTROLLING IN THE PRESENT CASE. IN THIS REGARD MR. BOWLES HAS SUBMITTED STATEMENTS FROM VARIOUS REAL ESTATE BROKERS AND ATTORNEYS IN THE ATLANTA AREA WHO ARE FREQUENTLY INVOLVED IN REAL ESTATE TRANSACTIONS. THESE STATEMENTS INDICATE THAT THE INTANGIBLE TAX IS AN EXPENSE CUSTOMARILY PAID AS A CLOSING COST BY THE PURCHASER OF A RESIDENCE IN THE ATLANTA AREA. SINCE THESE PEOPLE ARE KNOWLEDGEABLE OF THE CUSTOMS FOLLOWED IN CONNECTION WITH REAL ESTATE TRANSACTIONS IN THE ATLANTA AREA, IT APPEARS THAT THE GEORGIA INTANGIBLE TAX MAY BE REGARDED AS AN EXPENSE CUSTOMARILY PAID BY THE PURCHASER OF A RESIDENCE IN THAT AREA WHEN FINANCING IS HANDLED THROUGH CONVENTIONAL OR VA LOAN PROCEDURES.

IN VIEW OF THE ABOVE, MR. BOWLES MAY BE REIMBURSED FOR THE GEORGIA INTANGIBLE TAX PAID BY HIM IN CONNECTION WITH THE PURCHASE OF A RESIDENCE INCIDENT TO HIS TRANSFER.