§ 10004. Sale or exchange

(a) As used in this chapter, “sale or exchange of land” shall mean any transfer of title to land for a consideration. As used in this chapter, “transfer” and “title” shall have the same meaning as “transfer” and “title to property” as used in section 9601 of this title, except as modified or enlarged by explicit provisions of this chapter and as limited herein to land. The transfer of an option for the sale or exchange of land shall be considered a transfer of title to land for the purposes of this chapter.

(b) Contracts for the sale of land constitute sales or exchanges of land for all purposes of this chapter. However, contracts shall not constitute sales or exchanges until some consideration has passed thereunder to or for the benefit of the seller or exchanger. The sale or exchange is considered to take place at the time any consideration whatsoever, of whatever nature, first passes under the contract. If the land has been held by the seller for less than one year, the entire tax due on the sale then shall become due as provided under this chapter, even if the transaction between the parties involves an installment sale. A mere promise to purchase, and amounts paid as earnest money, or amounts paid in deposit or amounts paid in escrow to which the seller has no immediate right, do not constitute the passing of consideration for the purposes of this chapter.

(c) Any sale or exchange of shares in a corporation or other entity, or of comparable rights or property interests in any other form of organization or legal entity, that effectively entitles the purchaser to the use or occupancy of land constitutes a sale or exchange of land. (Added 1973, No. 81, § 8, eff. May 1, 1973; amended 1987, No. 64, § 6, eff. June 1, 1987.)