House Committee Passes Local Government-Led Scheme to Increase Business Property Taxes

May 23, 2016

In an unfortunate development, the Michigan House Tax Policy Committee last week passed legislation (House Bill 5578) that would dramatically change how real property is taxed in Michigan. HB 5578 would limit the variables that can be considered when hearing an appeal of an assessment of real property (buildings and homes.) Attempts by local governments to over-assess large retail taxpayers have been repeatedly rebuffed by the Michigan courts, so now local officials are asking Michigan legislators to overturn traditional assessing practices by forcing the Michigan Tax Tribunal to ignore well-established appraisal variables during the appeals process. 

This round-about approach would result in a myriad of problems, least of which are built-in tax increases and more costly appeals. This would also lead to big differences between how similar properties are treated: some taxpayers who are assessed locally and do not appeal would be evaluated under one set of standards while taxpayers who choose to appeal to the Michigan Tax Tribunal would be evaluated under a different set of standards. The result could be an unconstitutional violation of Michigan’s rules about treating property uniformly. Unfortunately, all these facts have not stopped legislators from moving ahead on this bad legislation. The Michigan Chamber will continue to speak out against this unnecessary bill.

For more information on this or other tax-related items, please contact Tricia Kinley at tkinley@michamber.com