LANSING – Legislation approved by the House Tax Policy Committee today is a backhanded attempt to discourage taxpayers from appealing their property assessments, Michigan Retailers Association (MRA) said today.
“We’re disappointed that lawmakers failed to take into consideration the concerns expressed by taxpayers and reported out a deeply flawed bill that would turn the appeals process on its head and drive up taxes,” said Amy Drumm, MRA director of government affairs.
“The legislation’s changes to the Michigan Tax Tribunal Act are nothing less than an attempt to increase taxes by discouraging taxpayers from challenging the value placed on their property by local government.”
Drumm said the bill would increase the cost and length of commercial property tax appeals by requiring additional detailed studies and use of experts. Those costs would be prohibitive for a small or medium size business.
The appeal process also would be slanted against taxpayers by pushing the Michigan Tax Tribunal to disregard the concept of True Cash Value, which is defined in the General Property Tax Act as the usual selling price.
Instead, the legislation includes so many restrictions against the use of “comparable sales” in determining a property’s value that it strongly favors use of the “replacement cost” valuation method. Replacement value can greatly overstate what a buyer would pay for a property.
In addition, HB 5578 turns the Tax Tribunal, a judicial body, into an appraisal unit and creates different appeals processes for different categories of taxpayers. In creating different rules for different taxpayers, the bill violates the Michigan Constitution’s uniformity clause that requires all property to be valued using the same methods.
“Changing the role of the Tax Tribunal Act through HB 5578 in response to local governments’ complaints with a few tax tribunal cases they lost is short-sighted, inappropriate and unconstitutional,” Drumm said.
