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926 North Ardmore Ave. v. County of Los Angeles

Tuesday, July 18, 2017  
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926 North Ardmore Ave. v. County of Los Angeles    

Cal. Supreme Court (S222329)  6/29/17

The court affirmed the appellate court, holding that documentary transfer tax is owed when there is a change in ownership or control of an entity that owns real property. The concept of "realty sold" in the documentary transfer tax statutes (Revenue and Taxation Code Sections 11911 et seq.) has the same meaning as "change in ownership" in the statutes requiring a reassessment of the property for property tax purposes (Revenue and Taxation Code Sections 60 et seq.), and "change in ownership" includes transfer of ownership or control of an entity.

The court pointed out that prior to 2010, County Recorders could not determine when a change in ownership of an entity occurred. Tax forms reflecting the change in ownership were required to be filed with the State Board of Equalization, which would share that information with Tax Assessors. But R&TC Sections 408 and 481 barred that information from being shared with County Recorders. In 2009, the Legislature adopted SB 816, which amended several R&TC Sections by requiring the assessor to provide access to his or her record to the county recorder when conducting an investigation to determine whether a documentary transfer tax should be imposed.

California Land Title Association

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