Is Conveyance of Land Subject to the Realty Transfer Tax ?

In Penn Towers Associates, LP v. Commonwealth of Pennsylvania, 866 A.2d 1205 (Pa. Cmwlth. 2005), Soffer had conveyed real estate located in Wilkins Township, Pennsylvania, to Penn Towers, a Delaware limited partnership. Soffer was the sole limited partner of Penn Towers with a 99% interest. Soffer Management L.L.C., owned entirely by Soffer, was Penn Towers' general partner with a 1% interest. Soffer recorded the deed concerning the real estate and claimed a 100% exemption from the realty transfer tax. Because Soffer owned a 100% in Penn Towers (Grantee) and a 100% in Soffer Management, LLC (Grantee), "the deed in this transaction does not effect a transfer of a beneficial interest in the property to someone other than the Grantor." Id. at 1206. The department issued a realty transfer tax notice of determination under Section 1102-C of the Act, 72 P.S. 8102-C. The Board of Appeals and the Board of Finance and Revenue sustained the department's determination. On appeal, Soffer also cited Exton Plaza in support of his argument that the conveyance was not subject to the realty transfer tax because as the sole owner of Penn Tower he effectively transferred the property to himself. Again, this Court rejected such an argument: In Farda, we distinguished the situation in Exton Plaza from that where the Fardas, a husband and wife as grantors, were individuals conveying certain real estate to a limited partnership of which they were the sole partners, not a business partnership wishing to change its business form under Pennsylvania law. Thus, the deed in Farda conveyed legal title to 'someone other than the grantors' because the Fardas were not the same as the partnership to which they transferred the property. For this reason, we held that the transfer was governed by section 1102-C.4 of the Act . . . . The situation in Farda is repeated here. Soffer, as grantor, is an individual and is different from Penn Towers, a limited partnership governed by the laws for foreign registered limited liability partnerships .... Because the deed in this case, which transferred property from Soffer to Penn Towers, is a conveyance between a partnership and a partner, the transfer is subject to realty transfer tax under the Act . . . .Penn Towers Associates, 866 A.2d at 1207.