October 27, 1993
John J. Chewning
P.O. Box 573
Hopkinsville, Kentucky 42241
Dear Mr. Chewning:
You have asked if all transfers to the federal government are exempt from the real estate transfer tax in KRS 142.050.
Our opinions are in conflict on this question. In OAG 74-508 and OAG 78-798, we said that all transfers to and from a governmental unit are exempt from the tax. In OAG 77-152 and OAG 78-748, we said that transfers to a governmental unit are exempt only if the transfer is a gift or there is only nominal consideration. None of these opinions references any of the others.
The statute in question, KRS 142.050(7), says:
The tax imposed by this section shall not apply to a transfer of title:
. . .
(b) To, in the event of a deed of gift or a deed with nominal consideration, or from the United States of America, this state, any city or county within this state, or any instrumentality, agency, or subdivision hereof[.]
OAG 74-508 and OAG 78-798 give perfunctory treatment to the question, cite no authorities, and offer no substantive analysis. They also reflect an apparent misunderstanding of the plain terms of the statute. In contrast, OAG 77-152 and OAG 78-748 provide substantial analysis and cite numerous authorities in support of the conclusion reached. They are also consistent with a common sense reading of the statute. We have no hesitation in stating that the phrase in the event of a deed of gift or a deed with nominal consideration modifies the word to, so that conveyances to a governmental unit are exempt only if they involve a gift or a merely nominal consideration.
OAG 74-508 and OAG 78-798 are overruled, and OAG 77-152 and OAG 78-748 are affirmed.
Ross T. Carter
Assistant Attorney General