Invalid Excise: Washington's Real Estate Excise Tax Applied to a Change in Control

Since the early 1930s, Washington state courts have considered challenges to the validity of certain fees or excise taxes. Typically the issue was whether a tax or fee was an excise tax that was invalid as applied to a property tax. An excise tax maybe invalid as applied if the incidents do not meet the requirements of a valid excise tax. A tax on the mere ownership of property is a property tax no matter how it is labeled and it must not violate the Washington constitution's prohibition against nonuniform property taxes. The Washington Supreme Court has addressed these arguments attacking the validity of a number of different types of taxes, including the business and occupations tax, sales and use tax, motor vehicle registration tax, fees for improvements, and the real estate excise tax (REET). This Article addresses a particular problem with the technical validity of the REET as applied to a change in control of an entity that owns real property in the State of Washington.