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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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If a real estate transaction is exempt from transfer taxes

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If a real estate transaction is exempt from transfer taxes at the state level for a principal agent/straw party (ie an LLC with only one owner transferring the deed to their personal name for for refinance purposes), should the municipality also exempt the transaction? This is in Philadelphia, Pa.

Thank you for your question. Please permit me to assist you--I happen to be a Pennsylvania licensed professional.

My apologies but the answer is 'no', a municipality is separate from the state in terms of taxation and obligations. There are typically three layers of potential tax obligation on a transaction. There is the federal layer, a state layer, and a local or a municipal layer. None of those are related to one another, and a transaction that may have no state obligation may still have local and federal obligations. Similarly a transaction that may have no local obligation may still have state or federal obligations, and so forth. The municipality should only exempt the transaction if municipal rules so permit, but otherwise a state exemption is not the same as a municipal obligation in this instance.

Hope that helps.

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