Taxpayers that paid Pennsylvania or Philadelphia real estate transfer tax on certain transactions involving real property located in Philadelphia during the period of July 1, 2012 through January 5, 2013 may be entitled to refunds.
Pennsylvania publishes a common level ratio (“CLR”) for each county in the Commonwealth, effective from July 1 until June 30 of the following year. In certain instances (e.g., taxable leases or acquisitions of real estate holding companies), the real estate transfer tax triggered by a transaction is based on a “computed value.” This value is the product of the assessed value of the property and the reciprocal of the county CLR (the “CLR Factor”) in effect at the time of transfer.
Because of ongoing litigation regarding the amount of the Philadelphia County CLR, the CLR Factor for Philadelphia County that was initially published by the Pennsylvania Department of Revenue for the period of July 1, 2012 through June 30, 2013 was subject to change. On January 5, 2013, the Pennsylvania Department of Revenue published a corrected CLR Factor for Philadelphia County. This corrected CLR Factor applies retroactively to all transactions on or after July 1, 2012. Because the effective date of the corrected CLR Factor is retroactive, any transfer tax paid with respect to real property located in Philadelphia County based on the tentative CLR Factor during the period of July 1, 2012 through January 5, 2013 was overpaid.
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For additional information and assistance in obtaining transfer tax refunds, contact one of the following Paradigm Tax Group Professionals today:
Holly Unck, Senior Managing Consultant: email@example.com, (602) 427-4059
Jack Nash, Senior Managing Consultant: firstname.lastname@example.org, (610) 409-9835