# WAC 458-61A-107: WAC 458-61A-107. Option to purchase

> Washington · Regulations · In force

URL: https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_107

## Section

- **Citation:** WAC 458-61A-107
- **Heading:** WAC 458-61A-107. Option to purchase
- **Jurisdiction:** Washington
- **Kind:** Regulations
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Washington Administrative Code / Title 458 / Chapter 458-61A / Section 458-61A-107

## Text

(1) Introduction. The real estate excise tax applies to a conveyance of real property upon the exercise of an option to purchase.
(2) Taxability of sales of options. The real estate excise tax does not apply to the grant or sale of an option and the real estate excise tax affidavit is not required for that transaction. However, the sale of an option is subject to business and occupation tax under the service and other category and should be reported on the combined excise tax return. RCW 82.04.290 .
(3) For the sole purpose of determining whether a transfer or acquisition of a controlling interest pursuant to the exercise of an option occurred within the period provided in RCW 82.45.010 and WAC 458-61A-101 , the date on which the option agreement was executed is deemed to be the date of the transfer or acquisition. For any other purpose; however, the date on which the option is exercised is the date of the transfer or acquisition. RCW 82.45.010 (2)(b). See WAC 458-61A-101 .
(4) Examples.
(a) Joe acquires an option at a cost of $100,000. The option, if exercised, allows Joe to purchase ten parcels of land for $700,000. As individual parcels, these lots of land are uneconomical to develop. Joe "packages" the land, making it economically feasible to develop by either obtaining sufficient acreage or required studies. Buildup, a real estate development and construction company, purchases Joe's option on the property for $2.3 million and subsequently exercises the option, paying $700,000 for the land. The real estate excise tax does not apply to the sale of the option, however the $2.3 million received for the option is subject to the business and occupation tax under the service and other category. The measure of the real estate excise tax is the $700,000 purchase price paid on the transfer of the land.
perty for $2.3 million and subsequently exercises the option, paying $700,000 for the land. The real estate excise tax does not apply to the sale of the option, however the $2.3 million received for the option is subject to the business and occupation tax under the service and other category. The measure of the real estate excise tax is the $700,000 purchase price paid on the transfer of the land.
(b) Consider the same initial facts as in the example in (a) of this subsection, but instead, Joe exercises the option, and subsequently sells the land to Buildup. The real estate excise tax applies to both the transfer to Joe and the subsequent transfer from Joe to Buildup.

## Nearby sections

- [WAC 458-61A-100 WAC 458-61A-100. Real estate excise tax — Overview](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_100.md)
- [WAC 458-61A-101 WAC 458-61A-101. Taxability of the transfer or acquisition of the controlling interest of an entity with an interest in real property located in this state](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_101.md)
- [WAC 458-61A-102 WAC 458-61A-102. Definitions](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_102.md)
- [WAC 458-61A-103 WAC 458-61A-103. Transfers involving an underlying debt](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_103.md)
- [WAC 458-61A-104 WAC 458-61A-104. Assignments](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_104.md)
- [WAC 458-61A-105 WAC 458-61A-105. Mobile and floating home sales](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_105.md)
- [WAC 458-61A-106 WAC 458-61A-106. Sales of improvements to land, leases, and leases with option](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_106.md)
- [WAC 458-61A-107 WAC 458-61A-107. Option to purchase](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_107.md)
- [WAC 458-61A-108 WAC 458-61A-108. Contractor](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_108.md)
- [WAC 458-61A-109 WAC 458-61A-109. Trading/exchanging property and boundary line adjustments](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_109.md)
- [WAC 458-61A-110 WAC 458-61A-110. Relocation service—Two-deed process](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_110.md)
- [WAC 458-61A-111 WAC 458-61A-111. Easements, development rights, water rights, and air rights](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_111.md)
- [WAC 458-61A-112 WAC 458-61A-112. Mineral rights and mining claims](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_112.md)
- [WAC 458-61A-113 WAC 458-61A-113. Timber, standing](https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_113.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/STATE_WA_ADC_458_61A_107. Check the current official text before relying on it. Not legal advice.