Board of County Commissioners of Kay County, Oklahoma v. Federal Housing Finance Agency
956 F. Supp. 2d 184
D.D.C.2013Background
- Kay County, Oklahoma sued FHFA (as conservator), Fannie Mae, and Freddie Mac seeking payment of Oklahoma documentary stamp (transfer) taxes on property sales.
- Oklahoma law requires sellers to purchase documentary stamps and affix them to deeds for recording; the tax is measured by the value of conveyed real property.
- Kay County alleges Defendants refused to pay and seeks declaratory judgment and damages for unpaid transfer taxes.
- Defendants moved to dismiss, arguing federal statutes exempt FHFA, Fannie Mae, and Freddie Mac from "all taxation" (except property taxes).
- The central legal question is whether the federal exemption from "all taxation" covers state and local real estate transfer (excise) taxes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FHFA/Fannie/Freddie are exempt from Oklahoma transfer tax | "All taxation" excludes excise/transfer taxes or transfer tax is a property tax | "All taxation" covers state/local transfer/recordation taxes imposed on the entities | Court: Exemption covers transfer tax; complaint dismissed |
| Whether transfer tax qualifies as a property tax exception | Transfer tax is measured by property value and thus falls within property-tax exception | Transfer tax is an excise/transaction tax, not a property tax | Court: Transfer tax is not a property tax; exception inapplicable |
| Whether Wells Fargo alters interpretation to limit "all taxation" to direct taxes | Relies on Wells Fargo to argue "all taxation" means only direct taxation | Argues Wells Fargo addressed tax-exempt PROPERTY context and is inapposite to entity exemptions | Court: Bismarck and related authority control; Wells Fargo not controlling here |
| Whether courts elsewhere have reached similar results | Points to contrary district rulings | Points to numerous courts and the Sixth Circuit construing "all taxation" broadly | Court: Adopts the uniform line of authority finding exemption applies |
Key Cases Cited
- United States v. Wells Fargo Bank, 485 U.S. 351 (distinguishing direct vs. excise taxes; addressed tax-exempt property)
- County of Oakland v. FHFA, 716 F.3d 935 (6th Cir.) (construed "all taxation" to exempt entities from state transfer taxes)
- Federal Land Bank of St. Paul v. Bismarck Lumber Co., 314 U.S. 95 (construed entity tax exemption to include sales taxes)
- Pittman v. Home Owners’ Loan Corp., 308 U.S. 21 (construed identical exemption to bar documentary stamp taxes)