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SANTA CLARA COUNTY CODE OF ORDINANCES: CHAPTER III. REAL PROPERTY TRANSFER TAX*

Copyrighted by SANTA CLARA COUNTY CODE & Municipal Code Corporation, 1998.

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CHAPTER III.
REAL PROPERTY TRANSFER TAX*

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Editor's note--Ord. No. NS-215.6, adopted September 25, 2007, amended Ch. III, in its entirety, to read as herein set out. Prior to inclusion of said ordinance, Ch. III pertained to similar subject matter. See also the Code Comparative Table.

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Sec. A30-32. Title; authority.

Pursuant to authority granted by the Documentary Transfer Tax Act (Revenue and Taxation Code § 11901 et seq.), the Board of Supervisors hereby imposes a tax on any document, transferring, for consideration, an ownership interest in real property located in whole or in part, within this County. This ordinance shall be known, and may be cited, as the Documentary Transfer Tax Ordinance, and the tax imposed hereby shall be known as the Documentary Transfer Tax of the County of Santa Clara. It is adopted pursuant to Part 6.7 of Division 2 of the Revenue and Taxation Code (Revenue and Taxation Code § 11901 et seq.) and Part 0.5, commencing and ending with Section 64 of Division 1 of the Revenue and Taxation Code.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-33. Imposed.

There is hereby imposed on each deed, instrument, or writing by which any lands, tenements, or other realty sold within the County shall be granted, assigned, transferred, or otherwise conveyed to, or vested in, the purchaser or purchasers, or any other person or persons, by his, her or their direction, when the consideration or value of the interest or property conveyed (exclusive of the value of any lien or encumbrance remaining thereon at the time of sale) exceeds $100.00 a tax at the rate of $0.55 for each $500.00 or fractional part thereof.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-34. Persons on whom imposed.

The tax imposed by Section A30-33 shall be paid by any person who makes, signs or issues any document or instrument subject to the tax, or for whose use or benefit the same is made, signed or issued.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-34.1. Mobile homes.

The transfer of any mobile home installed on a foundation system, pursuant to Section 18551 of the Health and Safety Code, and subject to local property taxation shall be subject to this part.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-35. Security for debt.

The tax imposed pursuant to this chapter shall not apply to any instrument in writing given to secure a debt.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-36. Government agencies.

Any deed, instrument or writing to which the United States or any agency or instrumentality thereof, any state or territory, or political subdivision thereof, is a party shall be exempt from any tax imposed pursuant to this chapter when the exempt agency is acquiring title.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-37. Plans of reorganization or adjustment.

The tax imposed pursuant to this chapter shall not apply to the making, delivering or filing of conveyances to make effective any plan of reorganization or adjustment:

(a) Confirmed under the Federal Bankruptcy Act, as amended;

(b) Approved in equity receivership proceeding in a court involving a railroad corporation, as defined in Section 101 of Title 11 of the United States Code, as amended;

(c) Approved in an equity receivership proceeding in a court involving a corporation, as defined in Section 101 of Title 11 of the United States Code, as amended; or

(d) Whereby a mere change in identity, form or place of organization is effected. Subsections (a) to (d), inclusive, of this section shall only apply if the making, delivery or filing of instruments of transfer or conveyances occurs within five years from the date of such confirmation, approval or change.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-38. Conveyances pursuant to Securities and Exchange Commission orders.

The tax imposed pursuant to this chapter shall not apply to the making or delivery of conveyances 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:

(a) 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;

(b) Such order specifies the property which is ordered to be conveyed;

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39. Transfer or termination of partnership or other entities.

(a) In the case of any realty held by a partnership or other entity treated as a partnership for federal income tax purposes, no levy shall be imposed pursuant to this part by reason of any transfer of an interest in the partnership or other entity or otherwise, if both of the following occur:

(1) The partnership or other entity treated as a partnership is considered a continuing partnership within the meaning of Section 708 of the Internal Revenue Code of 1986,

(2) The continuing partnership or other entity treated as a partnership continues to hold the realty concerned.

(b) If there is a termination of any partnership or other entity treated as a partnership for federal income tax purposes, within the meaning of Section 708 of the Internal Revenue Code of 1986, for purposes of this part, the partnership or other entity shall be treated as having executed an instrument whereby there was conveyed, for fair market value (exclusive of the value of any lien or encumbrance remaining thereon), all realty held by the partnership or other entity at the time of the termination.

(c) Not more than one tax shall be imposed pursuant to this chapter by reason of a termination described in Subsection (b), and any transfer pursuant thereto, with respect to the realty held by such partnership or other entity treated as a partnership at the time of such termination.

(d) No levy shall be imposed pursuant to this part by reason of any transfer between an individual or individuals and a legal entity or between legal entities that results solely in a change in the method of holding title to the realty and in which proportional ownership interests in the realty, whether represented by stock, membership interest, partnership interest, cotenancy interest, or otherwise, directly or indirectly, remain the same immediately after the transfer.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39.1. Foreclosure document.

Any tax imposed pursuant to this part shall not apply with respect to any deed, instrument, or writing to a beneficiary or mortgagee, which is taken from the mortgagor or trustor as a result of or in lieu of foreclosure; provided, that such tax shall apply to the extent that the consideration exceeds the unpaid debt, including accrued interest and cost of foreclosure. Consideration, unpaid debt amount and identification of grantee as beneficiary or mortgagee shall be noted on said deed, instrument or writing or stated in an affidavit or declaration under penalty of perjury for tax purposes.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39.2. Community or marital property.

(a) Any tax imposed pursuant to this part shall not apply with respect to any deed, instrument, or other writing which purports to transfer, divide, or allocate community, quasi-community, or quasi-marital property assets between spouses for the purpose of effecting a division of community, quasi-community, or quasimarital property which is required by a judgment decreeing a dissolution of the marriage or legal separation, by a judgment of nullity, or by any other judgment or order rendered pursuant to the Family Code, or by a written agreement between the spouses, executed in contemplation of any such judgment or order, whether or not the written agreement is incorporated as part of any of those judgments or orders.

(b) In order to qualify for the exemption provided in subdivision (a), the deed, instrument, or other writing shall include a written recital, signed by either spouse, stating that the deed, instrument, or other writing is entitled to the exemption.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39.3. Reconveyance: Exempt Agency.

Any tax imposed pursuant to this part shall not apply with respect to any deed, instrument, or other writing by which realty is conveyed by the State of California, any political subdivision thereof, or agency or instrumentality of either thereof, pursuant to an agreement whereby the purchaser agrees to immediately reconvey the realty to the exempt agency.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39.4. Non-profit corporation on behalf of the governmental unit.

Any tax imposed pursuant to this part shall not apply with respect to any deed, instrument, or other writing by which the State of California, any political subdivision thereof, or agency or instrumentality of either thereof, conveys to a nonprofit corporation realty the acquisition, construction, or improvement of which was financed or refinanced by obligations issued by the nonprofit corporation on behalf of a governmental unit, within the meaning of Section 1.103-1 (b) of Title 26 of the Code of Federal Regulations.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39.5. Gift and beneficiary transfer.

Any tax imposed pursuant to this part shall not apply to any deed, instrument, or other writing which purports to grant, assign, transfer, convey, divide, allocate, or vest lands, tenements, or realty, or any interest therein, if by reason of such inter vivos gift or by reason of the death of any person, such lands, tenements, realty, or interests therein are transferred outright to, or in trust for the benefit of, any person or entity.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-39.6. Transfer of real property of legal entities.

Documentary transfer tax is imposed when change of ownership occurs in any of the following:

(a) (1) When a corporation, partnership, limited liability company, other legal entity, or any other person obtains control through direct or indirect ownership or control of more than 50 percent of the voting stock of any corporation, or obtains a majority ownership interest in any partnership, limited liability company, or other legal entity through the purchase or transfer of corporate stock, partnership, or limited liability company interest, or ownership interests in other legal entities, including any purchase or transfer of 50 percent or less of the ownership interest through which control or a majority ownership interest is obtained, the purchase or transfer of that stock or other interest shall be a change of ownership of the real property owned by the corporation, partnership, limited liability company, or other legal entity in which the controlling interest is obtained.

(2) On or after January 1, 1996, when an owner of a majority ownership interest in any partnership obtains all of the remaining ownership interests in that partnership or otherwise becomes the sole partner, the purchase or transfer of the minority interests, subject to the appropriate application of the step-transaction doctrine, shall not be a change in ownership of the real property owned by the partnership.

(b) If property is transferred on or after March 1, 1975, to a legal entity in a transaction excluded from change in ownership by paragraph (2) of subdivision (a) of Section 62, then the persons holding ownership interests in that legal entity immediately after the transfer shall be considered the "original co-owners."

Whenever shares or other ownership interests representing cumulatively more than 50 percent of the total interests in the entity are transferred by any of the original coowners in one or more transactions, a change in ownership of that real property owned by the legal entity shall have occurred, and the property that was previously excluded from change in ownership under the provisions of paragraph (2) of subdivision (a) of Section 62 of the Revenue and Taxation Code shall be reappraised.

The date of reappraisal shall be the date of the transfer of the ownership interest representing individually or cumulatively more than 50 percent of the interests in the entity.

A transfer of shares or other ownership interests that results in a change in control of a corporation, partnership, limited liability company, or any other legal entity is subject to reappraisal as provided in subdivision (a) rather than this subdivision.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-40. Credit for city tax.

If the legislative body of any city in the County imposes a tax pursuant to Part 6.7 of Division 2 of the Revenue and Taxation Code (Revenue and Taxation Code § 11901 et seq.) equal to one-half the amount specified in Section A30-33, a credit shall be granted against the taxes due under this chapter in the amount of the city tax if the city's tax conforms to this part.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-41. Administration and allocation of tax.

The County Recorder shall administer this chapter and shall also administer any ordinance adopted by any city in the County pursuant to Part 6.7 of Division 2 of the Revenue and Taxation Code (Revenue and Taxation Code § 11901 et seq.) imposing a tax for which a credit is allowed by this chapter.

On or before the 15th day of the month, the Recorder shall report to the Director of Finance or his delegate the amounts of taxes collected during the preceding month pursuant to this chapter and each such city ordinance. The Director of Finance shall allocate and distribute monthly said taxes as follows:

(a) All moneys which relate to transfers of real property located in the unincorporated territory of the County shall be allocated to the County.

(b) All moneys which relate to transfers of real property located in a city in the County which has imposed a tax pursuant to said Part 6.7 (Revenue and Taxation Code § 11901 et seq.) shall be allocated one-half to such city and one-half to the County.

(c) All moneys which relate to transfers of real property located in a city in the County which imposes a tax on transfers of real property not in conformity with said Part 6.7 (Revenue and Taxation Code § 11901 et seq.) shall be allocated to the County.

(d) All moneys which relate to transfers of real property in a city in the County which does not impose a tax on transfers of real property shall be allocated to the County.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-42. Recordation subject to payment of tax.

The Recorder shall not record any deed, instrument or writing subject to the tax imposed by this chapter unless the tax is paid at the time of recording. A declaration of the amount of tax due, signed by the party determining the tax or his agent, shall appear on the face of the document. The declaration shall include a statement that the consideration or value on which the tax due was computed was, or that it was not, exclusive of the value of a lien or encumbrance remaining on the interest or property conveyed at the time of sale. If the party submitting the document so requests, the declaration may be made on a separate paper which shall be affixed to the document by the Recorder after the permanent record is made and before the original is returned as specified in Government Code Section 27321. The Recorder may rely on the declaration as to the amount of the tax due provided he has no reason to believe that the full amount of the tax due has not been paid.

Every document subject to tax hereunder which is submitted for recordation shall show on the face of the document, or in a separate document, the location of the lands, tenements or other realty described in the document. If said lands, tenements or other realty are located within a city in the County, the name of the city shall be set forth. If said lands, tenements or other realty are located in the unincorporated area, of the County, that fact shall be set forth.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-42.5. Requirement of tax roll parcel number.

(a) Each deed, instrument or writing by which lands, tenements, or other realty is sold, granted, assigned, transferred, or otherwise conveyed, shall have noted upon it the tax roll parcel number. The number shall be used only for administrative and procedural purposes and shall not be proof of title and in the event of any conflicts, the stated legal description noted upon the documents shall govern.

(b) The validity of any document described in Subsection (a) shall not be affected if the tax roll parcel number noted thereon is erroneous or omitted, and there shall be no liability attaching to any person for an error in such number or for omission of such number.

(c) If the document describes a parcel which has been created by the division of an existing parcel and which at the time of the recording has not been given a separate parcel number, the document shall have noted upon it the words "portion of" and the parcel number of the parcel from which it was created.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-43. Claims for refunds.

Claims for refunds of taxes imposed pursuant to this chapter shall be governed by the provisions of Chapter 5 of Part 9 of Division 1 of the Revenue and Taxation Code (Revenue and Taxation Code § 5096 et seq.).

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-44. Interpretation.

In the administration of this chapter, the Recorder shall interpret its provisions consistently with Part 6.7 of Division 2 of the Revenue and Taxation Code (Revenue and Taxation Code § 11901 et seq.) and Part 0.5 commencing and ending with Section 64 of Division 1 of the Revenue and Taxation Code.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-45. Authority to require records.

Whenever the County Recorder has reason to believe that the full amount of tax due under this chapter has not been paid, he may, by notice served upon any person liable therefor, require him to furnish a true copy of his records relevant to the amount of the consideration or value of the interest or property conveyed.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-46. Violations.

Any person or persons who makes, signs, issues or accepts or causes to be made, signed, issued or accepted and who submits or causes to be submitted for recordation any deed, instrument or writing subject to the tax imposed by this chapter and makes any material misrepresentation of fact for the purpose of avoiding all or any part of the tax imposed by this chapter shall be guilty of a misdemeanor.

No person or persons shall be liable, either civilly or criminally, for any unintentional error made in designating the location of the lands, tenements or other realty described in a document subject to the tax imposed by this chapter.

(Ord. No. NS-215.6, 9-25-07)

Sec. A30-46.1. Delinquency.

(a) Delinquency. For purposes of this section, the documentary transfer tax is due when either a deed, instrument or writing effecting a transfer subject to the tax is delivered to the County Recorder, or upon notice of documentary transfer tax due by the County Recorder pursuant to Section A30.39.6. The documentary transfer tax shall be delinquent if not paid at the time the documentary transfer tax is due.

(b) Delinquency notice. The County Recorder shall send notices of delinquent documentary transfer tax. In the event the person liable for the tax fails to comply, the County Recorder shall transfer the matter to the County Tax Collector for further collection and initiation of lien proceedings.

(c) If the County Tax Collector issues a tax lien for non-payment of documentary transfer tax, the County Recorder shall record a tax lien against the real property.

(Ord. No. NS-215.6, 9-25-07)