Tuesday, March 12, 2013

Deeds Excise Tax and Governmental Entities

Massachusetts imposes an excise tax on the seller of real estate based on the sales price of the property. Governmental entities, however, are exempt from that tax. Specifically, "the excise does not apply to any deed to which the commonwealth, a city or town or the commonwealth, or the United States, or any of their agencies are a party." Since it is the seller who is liable for the payment of the tax, it would seem logical for the exemption to apply only when the governmental entity is the seller, several Department of Revenue rulings from the early 1990s emphasized that the exemption occurred whenever the governmental entity was a "party to the transaction" which means either seller or buyer. That is how we have enforced this exemption through the years and as far as I can tell, that's still DOR's interpretation of the law.

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