Opinion ID: 2310780
Heading Depth: 2
Heading Rank: 2

Heading: Permanent loan deed of trust exemption.

Text: In the alternative, L Street Associates contends that even if the 1995 deed of trust was subject to taxation under the Act, it was nevertheless partially exempt under the permanent loan deed of trust exemption. D.C.Code § 45-922(11). According to the taxpayer, this is so because the 1995 permanent loan replaced the 1970 construction loan. Consequently, the taxpayer claims to be entitled to a partial $88,000.00 refund of the recordation tax that it paid in 1995. We have concluded, in our discussion of Case No. 1, that the trial judge's ruling denying 19th Street Associates the benefit of the permanent loan deed of trust exemption was based on an incorrect construction of the statute. See Part IV A, supra. In this case, as in Case No. 1, the fact that the taxpayer did not pay a recordation tax at the time the 1970 construction loan was recorded does not necessarily make L Street Associates ineligible for the permanent loan deed of trust exemption. In 1970, no recordation tax was due on a construction loan, D.C.Code §§ 45-722(5), 45-723 (1967), and the taxpayer therefore did not violate any obligation to pay such a tax. In addition, the taxpayer in Case No. 2 does not face the problem that made its counterpart in Case No. 1 ineligible for the permanent loan deed of trust exemption. Unlike 19th Street Associates' second permanent loan at issue here, L Street Associates' 1995 permanent loan directly replaced an immediately preceding construction loan; there was no intervening permanent loan. The question whether L Street Associates is entitled to claim a permanent loan deed of trust exemption in the specific context of this case may turn, however, on matters that have not been adequately explored in the trial court or, for that matter, in the parties' appellate briefs. [23] We are therefore reluctant to resolve the issue, in the first instance, at the appellate level. Accordingly, we remand Case No. 2 to the trial court for further proceedings.