Opinion No. 75-326 (1975) Ag

DOCUMENTARY STAMP TAX When Farmer A transfers his land worth $70,000.00 plus $5,000.00 cash to Farmer B, the deed should have documentary stamps showing a $70,000.00 sale. When Farmer B transfers his land worth $75,000.00 to Farmer A, the deed should have documentary stamps showing a $75,000.00 sale. This is to acknowledge receipt of your letter wherein you state the following facts: "Farmer A owns a tract of land worth $70,000.00 and Farmer B owns a tract of land worth $75,000.00. Farmer A and Farmer B enter into an agreement to trade their tracts of land. Farmer A pays $5,000.00 cash to Farmer B for the exchange of deeds. There are not any liens or mortgages involved in the transaction." The question you raise is how much documentary stamps are required to be placed on the deeds. Title 68 O.S. 5101 [68-5101] (1971), states: "A. There is hereby imposed on each deed, instrument, or writing by which any lands, tenements, or other realty sold shall be granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or purchasers, or any other person or persons, by his 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 One Hundred Dollars ($100.00), a tax at the rate of fifty-five cents ($0.55) for each Five Hundred Dollars ($500.00) or fractional part thereof. "B. The tax is limited to conveyances of realty sold and does not apply to other conveyances. The tax attaches at the time the deed or other instrument of conveyance is executed and delivered to the buyer, irrespective of the time when the sale is made. "C. The term `sold' imports a transfer of an interest for a valuable consideration, which may involve money or anything of value. "D. The term `deed' includes any instrument or writing whereby realty is assigned, transferred, or otherwise conveyed to, or vested in the purchaser or, at his direction, any other person." Subsection A, paraphrased, states that the value of the vendor's interest that is transferred is what is subject to the documentary stamps. In the case of Johnston v. Oklahoma Tax Commission, 497 P.2d 1295 (Okl. 1972), the Court stated on page 1298: "The relevant matter is the value of the vendor's interest at the time of the transfer. If the vendor at that time has a pre-existing mortgage upon the property about to be transferred, the value of the vendor's interest that is to be transferred is the agreed value of the property less the encumbrance." The critical language is that language in Subsection C which includes as valuable consideration anything of value. In this instance, Farmer A is selling his farm for valuable consideration, which is the farm of Farmer B, worth $75,000.00. In addition, Farmer B is selling his farm to Farmer A for valuable consideration, which is the farm of Farmer A, worth $70,000.00 plus $5,000.00 cash. It is the opinion of the Attorney General that when Farmer A transfers his land worth $70,000.00 plus $5,000.00 cash to Farmer B, the deed should have documentary stamps showing a $70,000.00 sale. When Farmer B transfers his land worth $75,000.00 to Farmer A, the deed should have documentary stamps showing a $75,000.00 sale. (Todd Markum)