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Arizona doesn’t have a transfer tax and if lobbyists get their
way, it never will. The Arizona Association of Realtors filed
application for a ballot measure to institute a constitutional
ban on transfer taxes. The measure needs 230,000 valid voter
signatures by July 3 to get on the November ballot.
Supporters are pushing for the transfer tax ban as the state
deals with a budget deficit of more than $1 billion. It faces
opposition from groups open to tax increases to fund schools,
healthcare and transportation.
Thirty-five states and District of Columbia impose a tax on the
transfer of real property, according to the Federation of Tax
Administrators. The tax is typically based on the value of the
property being sold.
California, Louisiana, Ohio and some other states have no state
transfer taxes but allow local governments to impose them.
Transfer tax rates range from a low of 0.01% in Colorado to a
high of 2.2% in Washington D.C. In about 2/3 of the states
imposing the tax, the rate is below 0.5% of the value of the
transfer. In seven states and D.C., the state transfer tax rate
is 1% or greater.
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The Maryland Legislature recently closed a tax loophole that
allowed businesses to avoid paying transfer taxes.
Previously, commercial property owners could simply transfer
buildings or real
estate into a limited liability company and
then sell the controlling interest.
Since the law did not require these transactions to be recorded
with the assessments and taxation department, the deals were not
subject to transfer taxes.
The law changed with the passage of
Senate Bill 2. |
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