Which tax is levied at the time of recording a deed or similar transaction?

Which tax is levied at the time of recording a deed or similar transaction?

• A. Intangible sales tax
• B. Documentary stamp tax
• C. Ad valorem tax
• D. Franchise tax

Answer: (B)

Documentary stamp tax is the charge that applies to the actual recording of a deed or similar instrument. It’s a transfer tax tied to the act of recording the document, not to the ongoing value of the property or to the ownership itself. The tax is usually calculated based on the consideration or loan amount and is paid when the document is stamped and recorded, though who pays can depend on local practice or the contract. This sets it apart from other taxes: ad valorem tax is the annual property tax based on value; intangible tax applies to intangible assets, not to real estate documents; and franchise tax relates to the privilege of doing business or maintaining a franchise.

Documentary stamp tax is the charge that applies to the actual recording of a deed or similar instrument. It’s a transfer tax tied to the act of recording the document, not to the ongoing value of the property or to the ownership itself. The tax is usually calculated based on the consideration or loan amount and is paid when the document is stamped and recorded, though who pays can depend on local practice or the contract. This sets it apart from other taxes: ad valorem tax is the annual property tax based on value; intangible tax applies to intangible assets, not to real estate documents; and franchise tax relates to the privilege of doing business or maintaining a franchise.