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Published on Wednesday, January 16, 2013

Federal litigation on Freddie Mac and Fannie Mae tax exempt status

A recent news article included information regarding several pending and recently decided court cases around the country regarding the tax exemption of Freddie Mac and Fannie Mae from real estate excise and other taxes, and conflicting conclusions regarding their exempt status.

The Department of Revenue (DOR) has provided AWC with additional information about the impact of this issue in Washington State. Real estate excise taxes are imposed by both state and local governments and collected by the counties.  DOR will take the lead on monitoring this issue for both the state and local governments, particularly a pending case in the 9th circuit Court of Appeals from the state of Nevada that will drive how this issue will be resolved in our state.  DOR is aware of the issues surrounding potential recovery and will take steps to protect both the state and local governments’ interests pending the case outcomes and eventually will pursue recovery on both state and local portions of taxes if appropriate. In the meantime pending the court’s decision, DOR will continue its current policy of treating these entities as tax exempt.

If your city has questions regarding these issues, Patti Wilson, DOR’s local government liaison, can be contacted at pattiw@dor.wa.gov  for more information.

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