Property Tax Deadlines for 2006

Client Alert: Michigan Property Tax Appeal Deadlines / New SBT Credit for Personal Property Tax

January 2006
This client alert serves as a quick reminder of some of the fast approaching deadlines and procedures applicable to the appeal of real and/or personal property taxes in local Michigan taxing jurisdictions. NEW IN 2006 is the Single Business Tax (“SBT”) credit for personal property tax paid on industrial personal property. It is important that the 2006 Personal Property Statements be filed timely by February 20, 2006 not only for the amendment/appeal reasons discussed below but also to assure eligibility for the new SBT credit. Please feel free to contact any of the Dickinson Wright practitioners named below if you have questions concerning any of these deadlines/procedures. Real Property A chronological summary of the process for the 2006 assessment period is as follows: • December 31, 2005: 2006 property tax assessments are based on the value of the property as of December 31, 2005. • January - Early March: Notices of Assessment (not a tax bill) are issued to property owners from January through early March depending on the jurisdiction. Most jurisdictions issue assessments in mid-to-late February. Taxpayers must often act upon the deadlines discussed in this memo with short (or no) actual notice. Protective appeals are recommended if any relevant information or consequences are unavailable or unclear. Consider a valuation appeal if the true cash value of the property is less than twice the Taxable Value determined on the assessment/tax rolls. Notices of Assessment may also raise other issues including classification, transfer (uncapping), homestead (recently renamed “principal residence”) and leasehold improvement valuation. Please call to discuss the varying appeal procedures for these other issues. • February Assessor's Board of Review: Certain jurisdictions (including Detroit, Grand Rapids, Wyoming) require a protest during February to an Assessor's Board of Review as a prerequisite to a statutory protest to the jurisdiction’s March Board of Review. The 2006 meeting periods for the Boards in the larger jurisdictions are: Detroit (February 1-15), Grand Rapids (February 6-17) and Wyoming (February 6-24). Consult with the Assessor’s office in each jurisdiction concerning the availability of, and deadline for, a written protest as an alternative to a Board appearance. • March Board of Review (“BOR”): As a procedural prerequisite to a Michigan Tax Tribunal appeal of property tax valuation issues, a protest must be pursued in the taxing jurisdiction’s Board of Review which begins the second Monday in March (March 13, 2006) unless a city or township ordinance has established either the Tuesday or Wednesday after the second Monday in March (March 14 or 15, 2006) as the beginning of the BOR. Consult with the Assessor’s office in each jurisdiction concerning the availability of, and deadline for, a written protest as an alternative to a Board appearance. Some jurisdictions allow only nonresidents file a written appeal without a Board appearance. • June 5, 2005: A written determination by the local BOR must be provided to taxpayers by the first Monday in June. We recommend pursuing a timely Tribunal appeal even if a BOR determination has not been received. • June 30, 2006: If the BOR relief is inadequate (or unknown), a Petition must be filed in the Michigan Tax Tribunal by June 30th of the tax (billing) year at issue. If the valuation of a parcel is under active appeal for a prior year, an appeal of the 2006 assessment can be added to the existing Tribunal matter, by motion, without a 2006 BOR appeal. Such a Motion must also be filed by June 30, 2006.. Personal Property • February 20, 2006: Personal Property Statements (Form L-4175) must be filed with local taxing jurisdiction(s) by February 20, 2006. The return instructions appear to require filing by February 1, 2006 but recognize in an easily missed footnote the statutory due date of February 20th. File timely in order to preserve appeal and amendment rights. The recently enacted SBT credit effective for years beginning on or after January 1, 2006 for personal property taxes on industrial personal property also appears to require a timely filed Form L-4175. • February and March BORs: See above discussion of real property appeals for valuation appeal procedures. If personal property is not assessed in a manner consistent with personal property cost (depreciated to derive taxable value) reported on the Personal Property Statement as filed, a protective BOR appeal should be considered to preserve the right to pursue a valuation appeal. • Alternative Appeal Procedures: For certain types of error/mistake correction, alternative appeals to the State Tax Commission or directly to the Michigan Tax Tribunal are allowed without a prior BOR appeal and covering as much as a three-year period. Generally, a timely Personal Property Statement must have been filed in order to preserve these appeal rights. It is important to note that timely, and strict, compliance with the administrative review procedures set forth above is a prerequisite to contesting property tax issues in the Michigan Tax Tribunal and in succeeding proceedings in Michigan courts. Please call with your questions concerning the property tax appeal procedures and deadlines. Feel free to contact Jim Novis in Lansing (517-487-4713) or Tom Hammerschmidt in Ann Arbor (734-623-1602) to assist with the analysis of your tax obligations or appeal opportunities and obligations.