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§ 8102-C.3. Excluded transactions

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 72 P.S. Taxation and Fiscal AffairsEffective: July 13, 2016

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 72 P.S. Taxation and Fiscal Affairs
Chapter 5. Tax Reform Code of 1971
Article XI-C. Realty Transfer Tax (Refs & Annos)
Effective: July 13, 2016
72 P.S. § 8102-C.3
§ 8102-C.3. Excluded transactions
The tax imposed by section 1102-C1 shall not be imposed upon:
(1) A transfer to the Commonwealth or to any of its instrumentalities, agencies or political subdivisions by gift, dedication or deed in lieu of condemnation or deed of confirmation in connection with condemnation proceedings, or a reconveyance by the condemning body of the property condemned to the owner of record at the time of condemnation, which reconveyance may include property line adjustments provided said reconveyance is made within one year from the date of condemnation.
(2) A document which the Commonwealth is prohibited from taxing under the Constitution or statutes of the United States.
(3) A conveyance to a municipality, township, school district or county pursuant to acquisition by the municipality, township, school district or county of a tax delinquent property at sheriff sale or tax claim bureau sale.
(4) A transfer for no or nominal actual consideration which corrects or confirms a transfer previously recorded, but which does not extend or limit existing record legal title or interest.
(5) A transfer of division in kind for no or nominal actual consideration of property passed by testate or intestate succession and held by cotenants; however, if any of the parties take shares greater in value than their undivided interest, tax is due on the excess.
(6) A transfer between husband and wife, between persons who were previously husband and wife who have since been divorced, provided the property or interest therein subject to such transfer was acquired by the husband and wife or husband or wife prior to the granting of the final decree in divorce, between parent and child or the spouse of such child, between a stepparent and a stepchild or the spouse of the stepchild, between brother or sister or spouse of a brother or sister and brother or sister or the spouse of a brother or sister and between a grandparent and grandchild or the spouse of such grandchild, except that a subsequent transfer by the grantee within one year shall be subject to tax as if the grantor were making such transfer.
(7) A transfer for no or nominal actual consideration of property passing by testate or intestate succession from a personal representative of a decedent to the decedent's devisee or heir.
(8) A transfer for no or nominal actual consideration to a trustee of an ordinary trust where the transfer of the same property would be exempt if the transfer was made directly from the grantor to all of the possible beneficiaries that are entitled to receive the property or proceeds from the sale of the property under the trust, whether or not such beneficiaries are contingent or specifically named. A trust clause which identifies the contingent beneficiaries by reference to the heirs of the trust settlor as determined by the laws of the intestate succession shall not disqualify a transfer from the exclusion provided by this clause. No such exemption shall be granted unless the recorder of deeds is presented with a copy of the trust instrument that clearly identifies the grantor and all possible beneficiaries.
(8.1) A transfer for no or nominal actual consideration to a trustee of a living trust from the settlor of the living trust. No such exemption shall be granted unless the recorder of deeds is presented with a copy of the living trust instrument.
(9) A transfer for no or nominal actual consideration from a trustee of an ordinary trust to a specifically named beneficiary that is entitled to receive the property under the recorded trust instrument or to a contingent beneficiary where the transfer of the same property would be exempt if the transfer was made by the grantor of the property into the trust to that beneficiary. However, any transfer of real estate from a living trust during the settlor's lifetime shall be considered for the purposes of this article as if such transfer were made directly from the settlor to the grantee.
(9.1) A transfer for no or nominal actual consideration from a trustee of a living trust after the death of the settlor of the trust or from a trustee of a trust created pursuant to the will of a decedent to a beneficiary to whom the property is devised or bequeathed.
(9.2) A transfer for no or nominal actual consideration from the trustee of a living trust to the settlor of the living trust if such property was originally conveyed to the trustee by the settlor.
(10) A transfer for no or nominal actual consideration from trustee to successor trustee.
(11) A transfer:
(i) for no or nominal actual consideration between principal and agent or straw party; or
(ii) from or to an agent or straw party where, if the agent or straw party were his principal, no tax would be imposed under this article.
Where the document by which title is acquired by a grantee or statement of value fails to set forth that the property was acquired by the grantee from, or for the benefit of, his principal, there is a rebuttable presumption that the property is the property of the grantee in his individual capacity if the grantee claims an exemption from taxation under this clause.
(12) A transfer made pursuant to the statutory merger or consolidation of a corporation or statutory division of a nonprofit corporation, except where the department reasonably determines that the primary intent for such merger, consolidation or division is avoidance of the tax imposed by this article.
(13) A transfer from a corporation or association of real estate held of record in the name of the corporation or association where the grantee owns stock of the corporation or an interest in the association in the same proportion as his interest in or ownership of the real estate being conveyed and where the stock of the corporation or the interest in the association has been held by the grantee for more than two years.
(14) A transfer from a nonprofit industrial development agency or authority to a grantee of property conveyed by the grantee to that agency or authority as security for a debt of the grantee or a transfer to a nonprofit industrial development agency or authority.
(15) A transfer from a nonprofit industrial development agency or authority to a grantee purchasing directly from it, but only if:
(i) the grantee shall directly use such real estate for the primary purpose of manufacturing, fabricating, compounding, processing, publishing, research and development, transportation, energy conversion, energy production, pollution control, warehousing or agriculture; and
(ii) the agency or authority has the full ownership interest in the real estate transferred.
(16) A transfer by a mortgagor to the holder of a bona fide mortgage in default in lieu of a foreclosure or a transfer pursuant to a judicial sale in which the successful bidder is the bona fide holder of a mortgage, unless the holder assigns the bid to another person.
(17) Any transfer between religious organizations or other bodies or persons holding title for a religious organization if such real estate is not being or has not been used by such transferor for commercial purposes.
<Section 51(11)(i)(B) of Act 2016, July 13, P.L. 526, No. 84, imd. effective, as amended by 2016, Nov. 21, P.L. 1517, No. 175, § 1, retroactive effective July 13, 2016, provides that the amendment by that Act of 72 P.S. § 8102-C.3(18) shall apply to transfers made after December 31, 2012.>
(18) Any of the following:
(i) A transfer to a conservancy.
(ii) A transfer from a conservancy to the United States, the Commonwealth or to any of their instrumentalities, agencies or political subdivisions.
(iii) A transfer from a conservancy where the real estate is encumbered by a perpetual agricultural conservation easement as defined by the act of June 30, 1981 (P.L. 128, No. 43),2 known as the “Agricultural Area Security Law,” and such conservancy has owned the real estate for at least two years immediately prior to the transfer.
(iv) A transfer of an agricultural conservation easement to or from the Commonwealth, a county, a local government unit or a conservancy under authority of the “Agricultural Area Security Law.”
(v) A transfer of a conservation easement or preservation easement under the act of June 22, 2001 (P.L. 390, No. 29),3 known as the “Conservation and Preservation Easements Act.”
(vi) A transfer of a perpetual historic preservation easement, a perpetual public trail easement or other perpetual public recreational use easement, a perpetual scenic preservation easement or a perpetual open-space preservation easement to or from the United States, the Commonwealth, a county, a local government unit or a conservancy.
(19) A transfer of real estate devoted to the business of agriculture to a family farm business by:
(i) a member of the same family which directly owns at least seventy-five per cent of each class of the stock thereof or the interests in that family farm business; or
(ii) a family farm business, which family directly owns at least seventy-five per cent of each class of stock thereof or the interests in that family farm business.
(19.1) Deleted by 2012, July 2, P.L. 751, No. 85, § 10, imd. effective.
(20) A transfer between members of the same family of an ownership interest in a real estate company or family farm business that owns real estate.
(21) A transaction wherein the tax due is one dollar ($1) or less.
(22) Leases for the production or extraction of coal, oil, natural gas or minerals and assignments thereof.
(23) A transfer of real estate:
(i) for no or nominal consideration from the Commonwealth or any of its instrumentalities, agencies or political subdivisions to a volunteer emergency medical services agency, volunteer fire company or volunteer rescue company; or
(ii) between two or more volunteer emergency medical services agencies, volunteer fire companies or volunteer rescue companies.
<Section 51(11)(i)(B) of Act 2016, July 13, P.L. 526, No. 84, imd. effective, as amended by 2016, Nov. 21, P.L. 1517, No. 175, § 1, retroactive effective July 13, 2016, provides that the amendment by that Act of 72 P.S. § 8102-C.3(24) shall apply to transfers made after December 31, 2012.>
(24) A transfer of real estate to or by a land bank. For the purposes of this clause, the term “land bank” shall have the same meaning as given to it in 68 Pa.C.S. § 2103 (relating to definitions).
In order to exercise any exclusion provided in this section, the true, full and complete value of the transfer shall be shown on the statement of value. For leases of coal, oil, natural gas or minerals, the statement of value may be limited to an explanation of the reason such document is not subject to tax under this article.

Credits

1971, March 4, P.L. 6, No. 2, art. XI-C, § 1102-C.3, added 1986, July 2, P.L. 318, No. 77, § 11, imd. effective. Amended 1989, July 1, P.L. 95, No. 21, § 7, imd. effective; 1994, June 16, P.L. 279, No. 48, § 28, effective July 1, 1994; 1997, May 7, P.L. 85, No. 7, § 18, effective July 1, 1997; 2012, July 2, P.L. 751, No. 85, § 10, imd. effective; 2013, July 9, P.L. 270, No. 52, § 25.1, imd. effective; 2016, July 13, P.L. 526, No. 84, § 16.5, imd. effective.
HISTORICAL AND STATUTORY NOTES
Act 2012-85 legislation
Act 2012-85, § 10, in par. (6), inserted “between a stepparent and a stepchild or the spouse of the stepchild”; rewrote par. (19), which prior thereto read:
“(19) A transfer of real estate devoted to the business of agriculture to a family farm corporation by a member of the same family which directly owns at least seventy-five per cent of each class of the stock thereof.”
; deleted par. (19.1), which read:
“(19.1) A transfer of real estate devoted to the business of agriculture to a family farm partnership by a member of the same family, which family directly owns at least seventy-five per cent of the interests in the partnership.”
; and in par. (20), substituted “real estate company or family farm business that” for “real estate company, family farm corporation or family farm partnership which”.
Section 30(4) of 2012, July 2, P.L. 751, No. 85, provides that the amendment of 72 P.S. § 8102-C.3(19), (19.1) and (20) “shall apply retroactively to any document made, executed, delivered, accepted or presented for recording on or after July 1, 2010.”
Act 2013-52 legislation
Act 2013-52, § 25.1, added par. (23).
Section 42(3) of 2013, July 9, P.L. 270, No. 52, imd. effective, provides that the addition of 72 P.S. § 8102-C.3(23) by this act shall apply to transactions occurring on or after November 1, 2011.
Act 2016-84 legislation
Act 2016-84, § 16.5, rewrote par. (18), which prior thereto read:
“(18) A transfer to a conservancy which possesses a tax-exempt status pursuant to section 501(c)(3) of the Internal Revenue Code of 1954 (68A Stat. 3, 26 U.S.C. § 501(c)(3)) and which has as its primary purpose preservation of land for historic, recreational, scenic, agricultural or open-space opportunities; or a transfer from such a conservancy to the United States, the Commonwealth or to any of their instrumentalities, agencies or political subdivisions; or any transfer from such a conservancy where the real estate is encumbered by a perpetual agricultural conservation easement as defined by the act of June 30, 1981 (P.L. 128, No. 43), known as the ‘Agricultural Area Security Law,’ and such conservancy has owned the real estate for at least two years immediately prior to the transfer.”
; and added par. (24).
Section 51(11)(i)(B) of Act 2016, July 13, P.L. 526, No. 84, imd. effective, as amended by 2016, Nov. 21, P.L. 1517, No. 175, § 1, retroactive effective July 13, 2016, provides that the amendment by that Act of 72 P.S. § 8102-C.3(18) and (24) shall apply to transfers made after December 31, 2012.
Act 2016-175 legislation
Section 2 of 2016, Nov. 21, P.L. 1517, No. 175, imd. effective, provides that “[n]otwithstanding the time limitations for filing a petition for refund under section 3003.1 of the act of March 4, 1971 (P.L. 6, No. 2) [72 P.S. § 10003.1], known as the Tax Reform Code of 1971:
“(1) a person that would be entitled to a refund of the tax imposed under Article XI-C of the Tax Reform Code of 1971 [72 P.S. § 8101-C et seq.] as a result of the amendment of section 51(11) of the amendatory act as it relates to transfers of real estate to or by a land bank; and
“(2) a person that would be entitled to a refund of tax as a result of the addition of the definition of “conservancy” in section 1101-C of the Tax Reform Code of 1971 [72 P.S. § 8101-C] and the amendment of section 1102-C.3(18) of the Tax Reform Code of 1971 [72 P.S. § 8102-C.3]
“but for the time limitations contained under section 3003.1 of the Tax Reform Code of 1971 may file for and obtain a refund of tax actually paid as long as the petition for refund is filed within six months of the effective date of this section.”

Footnotes

72 P.S. § 8102-C.
3 P.S. § 901 et seq.
32 P.S. § 5051 et seq.
72 P.S. § 8102-C.3, PA ST 72 P.S. § 8102-C.3
Current through 2017 Regular Session Acts 1 to 43, 45 and 49
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