MURRAY COUNTY v. HOMESALES, INC.
2014 OK 52
| Okla. | 2014Background
- Four foreclosures were confirmed in which JPMorgan Chase (Chase) was the successful bidder; sheriff's deeds were issued but recorded in the names of Chase-affiliated entities (Homesales, FNMA) rather than Chase.
- The grantees marked the deeds exempt from Oklahoma documentary stamp tax and paid no documentary stamps; county clerks forwarded no tax assessments to the Oklahoma Tax Commission (OTC).
- Murray and Johnston Counties sued to collect documentary stamp taxes, alleging the post-foreclosure transfers were taxable and the exemptions were improper; district court granted partial summary judgment for the Counties and certified the order for immediate appeal.
- Defendants (Homesales, Chase, EMC) argued Counties lack statutory authority to enforce the Documentary Stamp Tax Act (DSTA) and that the transfers were exempt or otherwise not "sales" subject to tax.
- The Oklahoma Supreme Court held: Counties lack statutory authority to prosecute DSTA violations (that enforcement rests with the OTC), but Counties have standing to seek declaratory/equitable relief; on the merits, Counties failed to prove the transfers involved "consideration" exceeding $100, so summary judgment for Counties was improper and was reversed and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Authority to enforce DSTA | Counties: general statutory power to "sue and be sued" allows them to collect unpaid documentary taxes | Defendants: DSTA and OTC rules vest administration/enforcement exclusively in Oklahoma Tax Commission | Held: Counties do not have statutory authority to prosecute DSTA violations; OTC has primary enforcement role |
| Standing to sue for relief | Counties: loss of county documentary-stamp share is cognizable injury; may seek declaratory/equitable relief | Defendants: without authority to enforce DSTA, Counties lack redressable interest | Held: Counties have standing to seek declaratory/equitable relief to protect public treasury (Glass precedent) |
| Whether transfers were "sales" subject to DSTA tax | Counties: post-foreclosure assignments to affiliates/principal were taxable sales (no exemption) | Defendants: transfers to affiliated entities or principal/agent transfers involved no "actual pecuniary value" (or were agent-principal/affiliate transfers exempt) | Held: Counties failed to show consideration > $100 in summary-judgment record; transfers not proven sales — summary judgment for Counties reversed |
| Applicability of specific exemptions | Counties: exemptions claimed on deed face were improper because grantees were not mortgage holders/purchasers | Defendants: exemptions apply where grantee is holder/principal or where transfers are agent-to-principal or inter-affiliate and involve no substantive consideration | Held: Court did not resolve the exemption validity because Counties did not prove a sale occurred; OTC rules support exemptions for agent/principal and inter-corporate transfers |
Key Cases Cited
- Johnston v. Oklahoma Tax Comm'n, 497 P.2d 1295 (Okla. 1972) (describing documentary stamp tax as a tax on deeds conveying property sold)
- Independent School Dist. No. 9 v. Glass, 639 P.2d 1233 (Okla. 1982) (school district had standing to seek equitable relief to protect public revenue)
- Jim Walter Homes, Inc. v. County Clerk of Okfuskee County, 734 P.2d 849 (Okla. Civ. App. 1986) (sheriff's deed obtained at confirmation hearing held taxable where consideration was exchanged)
- Berkeley Sav. & Loan Ass'n v. United States, 301 F. Supp. 22 (D.N.J. 1969) (transaction analysis focuses on whether transfer was for consideration and parties' intent)
- State ex rel. Oklahoma Tax Comm'n v. Texaco Exploration & Prod., Inc., 131 P.3d 705 (Okla. 2005) (tax enforcement is statutory; administrative remedies required)
- Founders Bank & Trust Co. v. Upsher, 830 P.2d 1355 (Okla. 1992) (foreclosure sales often do not realize fair market value; effects on tax calculations)