Michigan Tax News - January 2017

by Dickinson Wright
Contact

Dickinson Wright

Michigan’s 2017 property tax assessment notices are in the mail. Should you appeal?

Local assessors are in the process of sending annual notices of real and personal property tax assessments to property owners/taxpayers, who must determine whether the assessments are correct and whether an appeal should be filed. Here are a few thoughts on that decision and upcoming deadlines.

The assessment notice will state the “assessed value” and the tentative “state equalized value” (SEV) for both this year and the prior year. Those values should not exceed 50% of market value. While a substantial increase in assessed value warrants scrutiny, the assessment can be appealed whether or not it was increased. Recent sales of either the subject property or comparable properties are often persuasive evidence of value. Changes in condition or obsolescence are sometimes unknown to the assessor or overlooked and can warrant an assessment reduction. All applicable appraisal approaches can be considered, but an appraisal is not required to start the appeal process. Assessments should also be uniform. If other similar properties are assessed lower than your property without justification, there may be a uniformity issue which can warrant an assessment reduction.

The assessment notice will also state the “taxable value” (TV) for the prior and present year and whether the property was transferred as to uncap the TV. Taxable value is the lesser of SEV and the previous year’s taxable value adjusted for inflation, with adjustments for additions and losses. The taxable value is uncapped and reset at SEV when a property transfers. Disputes sometimes arise concerning whether or when a property was transferred or the value of additions. The tax rates are applied to the taxable value when the tax bills are generated later in the year. Tax savings are generated from a value or uniformity appeal when a required reduction of SEV also requires a reduction of TV.

The assessment notices also contain the assessor’s classification of real property. Classifications are used for three purposes: (i) use in equalization (typically of little interest to taxpayers); (ii) to determine deadlines for appealing valuation or classification issues; and (iii) classifications control the application of certain exemptions. (For example, industrial personal property is exempt from the 6 mill State Education Tax and up to 18 mills of local school district operating millage. Commercial personal property is exempt from up to 12 mills of local school district operating millage). Classification appeals are first made at the local board of review in March and further appeal is then allowed to the State Tax Commission by June 30.

Every city and township has a local board of review (LBOR) that reviews the roll and hears appeals. These local boards meet beginning in early March. The meeting dates vary by jurisdiction. Appeals of assessments on some classes of property must be initiated in the local board of review; for other classes a LBOR appeal is optional.

The Michigan Tax Tribunal hears property tax appeals contesting the assessments as confirmed by the LBOR . Most assessment appeals must be filed by either May 31 or July 31, depending on the classification of the property involved.

  • May 31, 2017 is the filing deadline for appeals to the Tax Tribunal for commercial, industrial and developmental real property and commercial, industrial, or utility personal property. LBOR appeals for these is permitted but not required.
  • July 31, 2017 is the filing deadline for appeals to the Tax Tribunal of agricultural, residential or timber-cutover real property, or agricultural personal property. LBOR appeals are a prerequisite for these appeals.

The assessment notices must be sent at least 14 days before the LBOR meets in March, so owners will be receiving them between now and mid-February.

2017 Deadline for Claiming Qualified Eligible Manufacturing Personal Property Exemption is February 21, 2017

Qualified new and used eligible manufacturing personal property (as defined by MCL 211.9m and 211.9n) is exempt from ad valorem taxation, but the taxpayer must file a timely claim to receive the exemption. To claim this exemption, a fully completed form 5278 must be received by the assessor of the local unit of government where the qualified personal property is located no later than February 20 (February 21, 2017, due to the holiday). Owners of personal property subject to this exemption do not pay the property tax, but pay a much lower Essential Services Assessment. The form is at this site: https://www.michigan.gov/documents/taxes/5278_500796_7.pdf

This is the new personal property exemption that began being phased in last year. Briefly, if more than 50% of the personal property on a single occupied real property site (which can include multiple contiguous parcels) is used for either manufacturing or direct integrated support activities then all the personal property on the site (with exceptions for utility property and property used to generate or transmit electricity) is eligible manufacturing personal property (EMPP). EMPP qualifies for the exception if it is either new (in service after 12-31-2012) or old (first placed in service more than 10 years before the current calendar year). This provides a phase in of the exemption. The exemption for personal property placed in service between 2013 and 2007 phases in through 2022.

If the personal property on the site meets the “more than 50%” test all the property on that site will be reported on the form 5278. If the property on the site does not meet the exemption test, a standard personal property statement (form 4175) is filed for the personal property on that site and that form is also due on February 20 (February 21, 2017, due to the holiday).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Dickinson Wright | Attorney Advertising

Written by:

Dickinson Wright
Contact
more
less

Dickinson Wright on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.