San Jose Real Property Conveyance Tax Ordinance - Spidell

San Jose Real Property Conveyance Tax Ordinance

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Message Board San Jose Real Property Conveyance Tax Ordinance

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    Law Library

    My question relates to a San Jose city tax known as the San Jose Real Property Conveyance Tax. The ordinance doesn’t say that the tax is enacted pursuant to California’s Documentary Transfer Tax Act, but it effectively operates as the city tax under those provisions. Property was transferred as a bequest on death of the owner. A deed was filed with the County stating that there was no transfer tax due because of the exemption contained in Revenue & Taxation Code Section 11930 which provides an exemption for gifts and bequests. The County Recorder bounced the deed, saying that under the San Jose ordinance, there is still a tax due when the property is encumbered because the amount of the encumbrance is considered part of the consideration. The ordinance does include the amount of a continuing encumbrance within its definition of consideration. But the County’s interpretation allows the city to collect a tax when there is a clear exemption provided in state law. My question is whether San Jose, which is a charter city under California law, is authorized to enact taxes other than as provided for in state law? Phrased differently, do the exemptions in the state Documentary Transfer Tax Act automatically apply to city taxes regardless of whether they are in the city ordinance on the tax? Thanks in advance for your help.