Bill Text: MI HB5682 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Property tax; principal residence exemption; late application to local assessor for a principal residence exemption; allow in certain circumstances. Amends sec. 7cc & 53b of 1893 PA 206 (MCL 211.7cc & 211.53b).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2020-03-25 - Bill Electronically Reproduced 03/25/2020 [HB5682 Detail]
Download: Michigan-2019-HB5682-Introduced.html
HOUSE BILL NO. 5682
March 17, 2020, Introduced by Rep. Slagh and
referred to the Committee on Local Government and Municipal Finance.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 7cc and 53b (MCL 211.7cc and 211.53b), section 7cc as amended by 2018 PA 633 and section 53b as amended by 2017 PA 261.
the people of the state of michigan enact:
Sec. 7cc. (1) A principal residence is exempt from the
tax levied by a local school district for school operating purposes to the
extent provided under section 1211 of the revised school code, 1976 PA 451, MCL
380.1211, if an owner of that principal residence claims an exemption as provided
in this section. Notwithstanding the tax day provided in section 2, the status
of property as a principal residence shall be determined on the date an
affidavit claiming an exemption is filed under subsection (2).
(2) Except as otherwise
provided in subsection (5), an owner of property may claim 1 exemption under
this section by filing an affidavit on or before May 1 for taxes levied before
January 1, 2012 or, for taxes levied after December 31, 2011, on or before June
1 for the immediately succeeding summer tax levy and all subsequent tax levies
or on or before November 1 for the immediately succeeding winter tax levy and
all subsequent tax levies with the local tax collecting unit in which the
property is located. The affidavit shall state that the property is owned and
occupied as a principal residence by that owner of the property on the date
that the affidavit is signed and shall state that the owner has not claimed a
substantially similar exemption, deduction, or credit on property in another state.
The affidavit shall be on a form prescribed by the department of treasury. One
copy of the affidavit shall be retained by the owner and 1 copy shall be
retained by the local tax collecting unit, together with all information
submitted under subsection (28) for a cooperative housing corporation. The
local tax collecting unit shall forward to the department of treasury a copy of
the affidavit and any information submitted under subsection (28) upon a
request from the department of treasury. The affidavit shall require the owner
claiming the exemption to indicate if that owner or that owner's spouse has
claimed another exemption on property in this state that is not rescinded or a
substantially similar exemption, deduction, or credit on property in another state
that is not rescinded. If the affidavit requires an owner to include a social
security number, that owner's number is subject to the disclosure restrictions
in 1941 PA 122, MCL 205.1 to 205.31. If an owner of property filed an affidavit
for an exemption under this section before January 1, 2004, that affidavit
shall be considered the affidavit required under this subsection for a
principal residence exemption and that exemption shall remain in effect until
rescinded as provided in this section.
(3) Except as otherwise
provided in subsection (5), a married couple who are required to file or who do
file a joint Michigan income tax return are entitled to not more than 1
exemption under this section. For taxes levied after December 31, 2002, a
person is not entitled to an exemption under this section in any calendar year
in which any of the following conditions occur:
(a) That person has
claimed a substantially similar exemption, deduction, or credit, regardless of
amount, on property in another state. Upon request by the department of
treasury, the assessor of the local tax collecting unit, the county treasurer
or his or her designee, or the county equalization director or his or her
designee, a person who claims an exemption under this section shall, within 30
days, file an affidavit on a form prescribed by the department of treasury
stating that the person has not claimed a substantially similar exemption,
deduction, or credit on property in another state. A claim for a substantially
similar exemption, deduction, or credit in another state occurs at the time of
the filing or granting of a substantially similar exemption, deduction, or
credit in another state. If the assessor of the local tax collecting unit, the
department of treasury, or the county denies an existing claim for exemption
under this section, an owner of the property subject to that denial cannot
rescind a substantially similar exemption, deduction, or credit claimed in
another state in order to qualify for the exemption under this section for any
of the years denied. If a person claims an exemption under this section and a
substantially similar exemption, deduction, or credit in another state, that
person is subject to a penalty of $500.00. The penalty shall be distributed in
the same manner as interest is distributed under subsection (25).
(b) Subject to
subdivision (a), that person or his or her spouse owns property in a state
other than this state for which that person or his or her spouse claims an
exemption, deduction, or credit substantially similar to the exemption provided
under this section, unless that person and his or her spouse file separate
income tax returns.
(c) That person has filed
a nonresident Michigan income tax return, except active duty military personnel
stationed in this state with his or her principal residence in this state.
(d) That person has filed
an income tax return in a state other than this state as a resident, except
active duty military personnel stationed in this state with his or her
principal residence in this state.
(e) That person has
previously rescinded an exemption under this section for the same property for
which an exemption is now claimed and there has not been a transfer of
ownership of that property after the previous exemption was rescinded, if either
of the following conditions is satisfied:
(i) That person has claimed an exemption under this section for
any other property for that tax year.
(ii) That person has
rescinded an exemption under this section on other property, which exemption
remains in effect for that tax year, and there has not been a transfer of
ownership of that property.
(4) Upon receipt of an affidavit filed under subsection (2) or subsection (19), and
unless the claim is denied under this section, the assessor shall exempt the property
from the collection of the tax levied by a local school district for school
operating purposes to the extent provided under section 1211 of the revised
school code, 1976 PA 451, MCL 380.1211, as provided in subsection (1) until
December 31 of the year in which the property is transferred or, except as
otherwise provided in subsections (5), (32), and (33), is no longer a principal
residence as defined in section 7dd, or the owner is no longer entitled to an
exemption as provided in subsection (3).
(5) Except as otherwise provided in this subsection and
subsections (32) and (33), not more than 90 days after exempted property is no
longer used as a principal residence by the owner claiming an exemption, that
owner shall rescind the claim of exemption by filing with the local tax
collecting unit a rescission form prescribed by the department of treasury. The
local tax collecting unit shall retain the rescission form and shall forward a
copy of it to the department of treasury upon a request from the department of
treasury. If an owner is eligible for and claims an exemption for that owner's
current principal residence, that owner may retain an exemption for not more
than 3 tax years on property previously exempt as his or her principal
residence if that property is not occupied, is for sale, is not leased, and is
not used for any business or commercial purpose by filing a conditional
rescission form prescribed by the department of treasury with the local tax
collecting unit within the time period prescribed in subsection (2). Beginning
in the 2012 tax year, subject to the payment requirement set forth in this
subsection, if a land contract vendor, bank, credit union, or other lending
institution owns property as a result of a foreclosure or forfeiture of a recorded
instrument under chapter 31, 32, or 57 of the revised judicature act of 1961,
1961 PA 236, MCL 600.3101 to 600.3285 and MCL 600.5701 to 600.5759, or through
deed or conveyance in lieu of a foreclosure or forfeiture on that property and
that property had been exempt under this section immediately preceding the
foreclosure, that land contract vendor, bank, credit union, or other lending
institution may retain an exemption on that property at the same percentage of
exemption that the property previously had under this section if that property
is not occupied other than by the person who claimed the exemption under this
section immediately preceding the foreclosure or forfeiture, is for sale, is
not leased to any person other than the person who claimed the exemption under
this section immediately preceding the foreclosure, and is not used for any
business or commercial purpose. A land contract vendor, bank, credit union, or
other lending institution may claim an exemption under this subsection by filing
a conditional rescission form prescribed by the department of treasury with the
local tax collecting unit within the time period prescribed in subsection (2).
Property is eligible for a conditional rescission if that property is available
for lease and all other conditions under this subsection are met. A copy of a conditional rescission
form shall be forwarded to the department of treasury according to a schedule
prescribed by the department of treasury. One copy of the conditional rescission shall be retained by
the owner and 1 copy shall be retained by the local tax collecting unit. The
local tax collecting unit shall forward to the department of treasury a copy of
an affidavit upon a request by the department of treasury. An
owner or a land contract vendor, bank, credit union, or other lending
institution that files a conditional rescission form shall annually verify to
the assessor of the local tax collecting unit on or before December 31 that the
property for which the principal residence exemption is retained is not
occupied other than by the person who claimed the exemption under this section
immediately preceding the foreclosure or forfeiture, is for sale, is not leased
except as otherwise provided in this section, and is not used for any business
or commercial purpose. The land contract vendor, bank, credit union, or other
lending institution may retain the exemption authorized under this section for
not more than 3 tax years. If an owner or a land contract vendor, bank, credit
union, or other lending institution does not annually verify by December 31
that the property for which the principal residence exemption is retained is
not occupied other than by the person who claimed the exemption under this
section immediately preceding the foreclosure or forfeiture, is for sale, is
not leased except as otherwise provided in this section, and is not used for
any business or commercial purpose, the assessor of the local tax collecting
unit shall deny the principal residence exemption on that property. Except as
otherwise provided in this section, if property subject to a conditional
rescission is leased, the local tax collecting unit shall deny that conditional
rescission and that denial is retroactive and is effective on December 31 of
the year immediately preceding the year in which the property subject to the
conditional rescission is leased. An owner who fails to file a rescission as
required by this subsection is subject to a penalty of $5.00 per day for each
separate failure beginning after the 90 days have elapsed, up to a maximum of
$200.00. This penalty shall be collected under 1941 PA 122, MCL 205.1 to
205.31, and shall be deposited in the state school aid fund established in
section 11 of article IX of the state constitution of 1963. This penalty may be
waived by the department of treasury. If a land contract vendor, bank, credit
union, or other lending institution retains an exemption on property under this
subsection, that land contract vendor, bank, credit union, or other lending
institution shall pay an amount equal to the additional amount that land
contract vendor, bank, credit union, or other lending institution would have
paid under section 1211 of the revised school code, 1976 PA 451, MCL 380.1211,
if an exemption had not been retained on that property, together with an
administration fee equal to the property tax administration fee imposed under
section 44. The payment required under this subsection shall be collected by
the local tax collecting unit at the same time and in the same manner as taxes
collected under this act. The administration fee shall be retained by the local
tax collecting unit. The amount collected that the land contract vendor, bank,
credit union, or other lending institution would have paid under section 1211
of the revised school code, 1976 PA 451, MCL 380.1211, if an exemption had not
been retained on that property is an amount that is not captured by any
authority as tax increment revenues and shall be distributed to the department
of treasury monthly for deposit into the state school aid fund established in
section 11 of article IX of the state constitution of 1963. If a land contract
vendor, bank, credit union, or other lending institution transfers ownership of
property for which an exemption is retained under this subsection, that land
contract vendor, bank, credit union, or other lending institution shall rescind
the exemption as provided in this section and shall notify the treasurer of the
local tax collecting unit of that transfer of ownership. If a land contract vendor,
bank, credit union, or other lending institution fails to make the payment
required under this subsection for any property within the period for which
property taxes are due and payable without penalty, the local tax collecting
unit shall deny that conditional rescission and that denial is retroactive and
is effective on December 31 of the immediately preceding year. If the local tax
collecting unit denies a conditional rescission, the local tax collecting unit
shall remove the exemption of the property and the amount due from the land
contract vendor, bank, credit union, or other lending institution shall be a
tax so that the additional taxes, penalties, and interest shall be collected as
provided for in this section. If payment of the tax under this subsection is
not made by the March 1 following the levy of the tax, the tax shall be turned
over to the county treasurer and collected in the same manner as delinquent
taxes under this act. An owner of property who previously occupied that
property as his or her principal residence but now resides in a nursing home,
assisted living facility, or, if residing there solely for purposes of
convalescence, any other location may retain an exemption on that property if
the owner manifests an intent to return to that property by satisfying all of
the following conditions:
(a) The owner continues to own that property while residing
in the nursing home, assisted living facility, or other location.
(b) The owner has not established a new principal residence.
(c) The owner maintains or provides for the maintenance of
that property while residing in the nursing home, assisted living facility, or
other location.
(d) That property is not leased and is not used for any
business or commercial purpose.
(6) Except as otherwise provided in subsections (5), (32),
and (33), if the assessor of the local tax collecting unit believes that the
property for which an exemption is claimed is not the principal residence of
the owner claiming the exemption, the assessor may deny a new or existing claim
by notifying the owner and the department of treasury county treasurer in writing of the reason for
the denial and advising the owner that the denial may be appealed to the
residential and small claims division of the Michigan tax tribunal within 35
days after the date of the notice. The assessor may deny a claim for exemption
for the current year and for the 3 immediately preceding calendar years. If the
assessor denies an existing claim for exemption, the assessor shall remove the
exemption of the property and, if the tax roll is in the local tax collecting
unit's possession, amend the tax roll to reflect the denial and the local
treasurer shall within 30 days of the date of the denial issue a corrected tax
bill for any additional taxes with interest at the rate of 1.25% per month or
fraction of a month and penalties computed from the date the taxes were last
payable without interest or penalty. If the tax roll is in the county
treasurer's possession, the tax roll shall be amended to reflect the denial and
the county treasurer shall within 30 days of the date of the denial prepare and
submit a supplemental tax bill for any additional taxes, together with interest
at the rate of 1.25% per month or fraction of a month and penalties computed
from the date the taxes were last payable without interest or penalty. Interest
on any tax set forth in a corrected or supplemental tax bill shall again begin
to accrue 60 days after the date the corrected or supplemental tax bill is
issued at the rate of 1.25% per month or fraction of a month. Taxes levied in a
corrected or supplemental tax bill shall be returned as delinquent on the March
1 in the year immediately succeeding the year in which the corrected or
supplemental tax bill is issued. If the assessor denies an existing claim for
exemption, the interest due shall be distributed as provided in subsection
(25). However, if the property has been transferred to a bona fide purchaser
before additional taxes were billed to the seller as a result of the denial of
a claim for exemption, the taxes, interest, and penalties shall not be a lien
on the property and shall not be billed to the bona fide purchaser, and the
local tax collecting unit if the local tax collecting unit has possession of
the tax roll or the county treasurer if the county has possession of the tax
roll shall notify the department of treasury of the amount of tax due,
interest, and penalties through the date of that notification. The department
of treasury shall then assess the owner who claimed the exemption under this
section for the tax, interest, and penalties accruing as a result of the denial
of the claim for exemption, if any, as for unpaid taxes provided under 1941 PA
122, MCL 205.1 to 205.31, and shall deposit any tax or penalty collected into
the state school aid fund and shall distribute any interest collected as
provided in subsection (25). The denial shall be made on a form prescribed by
the department of treasury. If
the property for which the assessor has denied a claim for exemption under this
subsection is located in a county in which the county treasurer or the county
equalization director have elected to audit exemptions under subsection (10),
the assessor shall notify the county treasurer or the county equalization
director of the denial under this subsection.The assessor shall forward to the
department of treasury a copy of a denial upon a request by the department of
treasury.
(7) If the assessor of the local tax collecting unit believes
that the property for which the exemption is claimed is not the principal
residence of the owner claiming the exemption and has not denied the claim, the
assessor shall include a recommendation for denial with any affidavit that is
forwarded to the department of treasury or, for an existing claim, shall send a
recommendation for denial to the department of treasury, stating the reasons
for the recommendation.
(8) The department of treasury shall determine if the
property is the principal residence of the owner claiming the exemption. Except
as otherwise provided in subsection (21), the department of treasury may review
the validity of exemptions for the current calendar year and for the 3
immediately preceding calendar years. Except as otherwise provided in
subsections (5), (32), and (33), if the department of treasury determines that
the property is not the principal residence of the owner claiming the
exemption, the department shall send a notice of that determination to the
local tax collecting unit and to the owner of the property claiming the exemption,
indicating that the claim for exemption is denied, stating the reason for the
denial, and advising the owner claiming the exemption of the right to appeal
the determination to the department of treasury and what those rights of appeal
are. The department of treasury may issue a notice denying a claim if an owner
fails to respond within 30 days of receipt of a request for information from
that department. An owner may appeal the denial of a claim of exemption to the
department of treasury within 35 days of receipt of the notice of denial. An
appeal to the department of treasury shall be conducted according to the
provisions for an informal conference in section 21 of 1941 PA 122, MCL 205.21.
Within 10 days after acknowledging an appeal of a denial of a claim of
exemption, the department of treasury shall notify the assessor and the
treasurer for the county in which the property is located that an appeal has
been filed. Upon receipt of a notice that the department of treasury has denied
a claim for exemption, the assessor shall remove the exemption of the property
and, if the tax roll is in the local tax collecting unit's possession, amend
the tax roll to reflect the denial and the local treasurer shall within 30 days
of the date of the denial issue a corrected tax bill for any additional taxes
with interest at the rate of 1.25% per month or fraction of a month and
penalties computed from the date the taxes were last payable without interest
and penalty. If the tax roll is in the county treasurer's possession, the tax
roll shall be amended to reflect the denial and the county treasurer shall
within 30 days of the date of the denial prepare and submit a supplemental tax
bill for any additional taxes, together with interest at the rate of 1.25% per
month or fraction of a month and penalties computed from the date the taxes
were last payable without interest or penalty. Interest on any tax set forth in
a corrected or supplemental tax bill shall again begin to accrue 60 days after
the date the corrected or supplemental tax bill is issued at the rate of 1.25%
per month or fraction of a month. The department of treasury may waive interest
on any tax set forth in a corrected or supplemental tax bill for the current
tax year and the immediately preceding 3 tax years if the assessor of the local
tax collecting unit files with the department of treasury a sworn affidavit in
a form prescribed by the department of treasury stating that the tax set forth
in the corrected or supplemental tax bill is a result of the assessor's
classification error or other error or the assessor's failure to rescind the
exemption after the owner requested in writing that the exemption be rescinded.
Taxes levied in a corrected or supplemental tax bill shall be returned as
delinquent on the March 1 in the year immediately succeeding the year in which
the corrected or supplemental tax bill is issued. If the department of treasury
denies an existing claim for exemption, the interest due shall be distributed
as provided in subsection (25). However, if the property has been transferred
to a bona fide purchaser before additional taxes were billed to the seller as a
result of the denial of a claim for exemption, the taxes, interest, and
penalties shall not be a lien on the property and shall not be billed to the
bona fide purchaser, and the local tax collecting unit if the local tax
collecting unit has possession of the tax roll or the county treasurer if the
county has possession of the tax roll shall notify the department of treasury
of the amount of tax due and interest through the date of that notification.
The department of treasury shall then assess the owner who claimed the
exemption under this section for the tax and interest plus penalty accruing as
a result of the denial of the claim for exemption, if any, as for unpaid taxes
provided under 1941 PA 122, MCL 205.1 to 205.31, and shall deposit any tax or
penalty collected into the state school aid fund and shall distribute any
interest collected as provided in subsection (25).
(9) The department of treasury may enter into an agreement
regarding the implementation or administration of subsection (8) with the
assessor of any local tax collecting unit in a county that has not elected to
audit exemptions claimed under this section as provided in subsection (10). The
agreement may specify that for a period of time, not to exceed 120 days, the
department of treasury will not deny an exemption identified by the department
of treasury in the list provided under subsection (11).
(10) A county may elect to audit the exemptions claimed under
this section in all local tax collecting units located in that county as
provided in this subsection. The election to audit exemptions shall be made by
the county treasurer, or by the county equalization director with the concurrence
by resolution of the county board of commissioners. The initial election to
audit exemptions shall require an audit period of 2 years. Before 2009,
subsequent elections to audit exemptions shall be made every 2 years and shall
require 2 annual audit periods. Beginning in 2009, an election to audit
exemptions shall be made every 5 years and shall require 5 annual audit
periods. An election to audit exemptions shall be made by submitting an
election to audit form to the assessor of each local tax collecting unit in
that county and to the department of treasury not later than April 1 preceding
the October 1 in the year in which an election to audit is made. The election
to audit form required under this subsection shall be in a form prescribed by the
department of treasury. If a county elects to audit the exemptions claimed
under this section, the department of treasury may continue to review the
validity of exemptions as provided in subsection (8). If a county does not
elect to audit the exemptions claimed under this section as provided in this
subsection, the department of treasury shall conduct an audit of exemptions
claimed under this section in the initial 2-year audit period for each local
tax collecting unit in that county unless the department of treasury has
entered into an agreement with the assessor for that local tax collecting unit
under subsection (9).
(11) If a county elects to audit the exemptions claimed under
this section as provided in subsection (10) and the county treasurer or his or
her designee or the county equalization director or his or her designee
believes that the property for which an exemption is claimed is not the
principal residence of the owner claiming the exemption, the county treasurer
or his or her designee or the county equalization director or his or her
designee may, except as otherwise provided in subsections (5), (32), and (33),
deny an existing claim by notifying the owner , and the assessor of the local tax collecting
unit , and the department of treasury in
writing of the reason for the denial and advising the owner that the denial may
be appealed to the residential and small claims division of the Michigan tax
tribunal within 35 days after the date of the notice. The county treasurer or
his or her designee or the county equalization director or his or her designee
may deny a claim for exemption for the current year and for the 3 immediately
preceding calendar years. If the county treasurer or his or her designee or the
county equalization director or his or her designee denies an existing claim
for exemption, the county treasurer or his or her designee or the county
equalization director or his or her designee shall direct the assessor of the
local tax collecting unit in which the property is located to remove the
exemption of the property from the assessment roll and, if the tax roll is in
the local tax collecting unit's possession, direct the assessor of the local
tax collecting unit to amend the tax roll to reflect the denial and the
treasurer of the local tax collecting unit shall within 30 days of the date of
the denial issue a corrected tax bill for any additional taxes with interest at
the rate of 1.25% per month or fraction of a month and penalties computed from
the date the taxes were last payable without interest and penalty. If the tax
roll is in the county treasurer's possession, the tax roll shall be amended to
reflect the denial and the county treasurer shall within 30 days of the date of
the denial prepare and submit a supplemental tax bill for any additional taxes,
together with interest at the rate of 1.25% per month or fraction of a month
and penalties computed from the date the taxes were last payable without
interest or penalty. Interest on any tax set forth in a corrected or
supplemental tax bill shall again begin to accrue 60 days after the date the
corrected or supplemental tax bill is issued at the rate of 1.25% per month or
fraction of a month. Taxes levied in a corrected or supplemental tax bill shall
be returned as delinquent on the March 1 in the year immediately succeeding the
year in which the corrected or supplemental tax bill is issued. If the county
treasurer or his or her designee or the county equalization director or his or
her designee denies an existing claim for exemption, the interest due shall be
distributed as provided in subsection (25). However, if the property has been
transferred to a bona fide purchaser before additional taxes were billed to the
seller as a result of the denial of a claim for exemption, the taxes, interest,
and penalties shall not be a lien on the property and shall not be billed to
the bona fide purchaser, and the local tax collecting unit if the local tax
collecting unit has possession of the tax roll or the county treasurer if the
county has possession of the tax roll shall notify the department of treasury
of the amount of tax due and interest through the date of that notification.
The department of treasury shall then assess the owner who claimed the
exemption under this section for the tax and interest plus penalty accruing as
a result of the denial of the claim for exemption, if any, as for unpaid taxes
provided under 1941 PA 122, MCL 205.1 to 205.31, and shall deposit any tax or
penalty collected into the state school aid fund and shall distribute any
interest collected as provided in subsection (25). The denial shall be made on a form prescribed by the
department of treasury. The county treasurer or his or her designee or the
county equalization director or his or her designee shall forward to the department
of treasury a copy of a denial upon a request by the department of treasury. The
department of treasury shall annually provide the county treasurer or his or
her designee or the county equalization director or his or her designee a list
of parcels of property located in that county for which an exemption may be
erroneously claimed. The county treasurer or his or her designee or the county
equalization director or his or her designee shall forward copies of the list
provided by the department of treasury to each assessor in each local tax
collecting unit in that county within 10 days of receiving the list.
(12) If a county elects to audit exemptions claimed under
this section as provided in subsection (10), the county treasurer or the county
equalization director may enter into an agreement with the assessor of a local
tax collecting unit in that county regarding the implementation or
administration of this section. The agreement may specify that for a period of
time, not to exceed 120 days, the county will not deny an exemption identified
by the department of treasury in the list provided under subsection (11).
(13) An owner may appeal a denial by the assessor of the
local tax collecting unit under subsection (6), a final decision of the
department of treasury under subsection (8), or a denial by the county
treasurer or his or her designee or the county equalization director or his or
her designee under subsection (11) to the residential and small claims division
of the Michigan tax tribunal within 35 days of that decision. An owner is not
required to pay the amount of tax in dispute in order to appeal a denial of a
claim of exemption to the department of treasury or to receive a final
determination of the residential and small claims division of the Michigan tax
tribunal. However, interest at the rate of 1.25% per month or fraction of a
month and penalties shall accrue and be computed from the date the taxes were
last payable without interest and penalty. If the residential and small claims
division of the Michigan tax tribunal grants an owner's appeal of a denial and
that owner has paid the interest due as a result of a denial under subsection
(6), (8), or (11), the interest received after a distribution was made under
subsection (25) shall be refunded.
(14) For taxes levied after December 31, 2005, for each
county in which the county treasurer or the county equalization director does
not elect to audit the exemptions claimed under this section as provided in
subsection (10), the department of treasury shall conduct an annual audit of
exemptions claimed under this section for the current calendar year.
(15) Except
as otherwise provided in subsection (5), an affidavit filed by an owner for the
exemption under this section rescinds all previous exemptions filed by that
owner for any other property. The department of treasury shall notify the
assessor of the local tax collecting unit in which the property for which a
previous exemption was claimed is located if the previous exemption is
rescinded by the subsequent affidavit. When an exemption is
rescinded as provided in subsection (5), the assessor of the local tax
collecting unit shall remove the exemption effective December 31 of the year in
which the affidavit was filed that rescinded the exemption. For any year for
which the rescinded exemption has not been removed from the tax roll, the
exemption shall be denied as provided in this section. However, interest and
penalty shall not be imposed for a year for which a rescission form has been
timely filed under subsection (5).
(16) Except as otherwise provided in subsection (30), if the
principal residence is part of a unit in a multiple-unit dwelling or a dwelling
unit in a multiple-purpose structure, an owner shall claim an exemption for
only that portion of the total taxable value of the property used as the
principal residence of that owner in a manner prescribed by the department of
treasury. If a portion of a parcel for which the owner claims an exemption is
used for a purpose other than as a principal residence, the owner shall claim
an exemption for only that portion of the taxable value of the property used as
the principal residence of that owner in a manner prescribed by the department
of treasury.
(17) When a county register of deeds records a transfer of
ownership of a property, he or she shall notify the local tax collecting unit
in which the property is located of the transfer.
(18) The department of treasury shall make available the
affidavit forms and the forms to rescind an exemption, which may be on the same
form, to all city and township assessors, county equalization officers, county
registers of deeds, and closing agents. A person who prepares a closing
statement for the sale of property shall provide affidavit and rescission forms
to the buyer and seller at the closing and, if requested by the buyer or seller
after execution by the buyer or seller, shall file the forms with the local tax
collecting unit in which the property is located. If a closing statement
preparer fails to provide exemption affidavit and rescission forms to the buyer
and seller, or fails to file the affidavit and rescission forms with the local
tax collecting unit if requested by the buyer or seller, the buyer may appeal
to the department of treasury within 30 days of notice to the buyer that an
exemption was not recorded. If the department of treasury determines that the
buyer qualifies for the exemption, the department of treasury shall notify the
assessor of the local tax collecting unit that the exemption is granted and the
assessor of the local tax collecting unit or, if the tax roll is in the
possession of the county treasurer, the county treasurer shall correct the tax
roll to reflect the exemption. This subsection does not create a cause of
action at law or in equity against a closing statement preparer who fails to
provide exemption affidavit and rescission forms to a buyer and seller or who
fails to file the affidavit and rescission forms with the local tax collecting
unit when requested to do so by the buyer or seller.
(19) An
owner who owned and occupied a principal residence on May 1 for taxes levied
before January 1, 2012 for which the exemption was not on the tax roll may file
an appeal with the July board of review or December board of review in the year
for which the exemption was claimed or the immediately succeeding 3 years. For
taxes levied after December 31, 2011, an An owner who owned and occupied a principal
residence on June 1 or November 1 for which the exemption was not on the tax
roll, or an owner of property who previously occupied that property as his or
her principal residence but did not occupy that property on June 1 or November
1 while residing in a nursing home, assisted living facility, or other location
under the circumstances described in subsection (5)(a) to (d), while absent on
active duty as a member of any branch of the Armed Forces of the United States,
including the Coast Guard, a reserve component of any branch of the Armed
Forces of the United States, or the National Guard, under the circumstances
described in subsection (32)(a) to (d), or while absent due to the damage or
destruction of the principal residence under the circumstances described in
subsection (33)(a) to (d), for which the exemption was not on the tax roll, may
file an appeal with the July
board of review or December board of review in the year for which the exemption
was claimed or the immediately succeeding 3 years. If an appeal of a claim for
exemption that was not on the tax roll is received not later than 5 days before
the date of the December board of review, the local tax collecting unit shall
convene a December board of review and consider the appeal pursuant to this
section and section 53b. affidavit with the local tax collecting unit claiming an
exemption under this section for the current calendar year or the immediately
preceding 3 calendar years. The affidavit for the exemption for the current
calendar year or the immediately preceding 3 calendar years shall be on the
form prescribed by the department of treasury in subsection (2). The affidavit
shall be processed by the assessor in accordance with subsection (4). Upon
request by the local tax collecting unit, the owner shall furnish proof within
30 days that the owner meets the requirements for the exemption for the current
calendar year or the immediately preceding 3 calendar years.
(20) An owner who owned and occupied a principal residence
within the time period prescribed in subsection (2) in any year before the 3
immediately preceding tax years for which the exemption was not on the tax roll
as a result of a qualified error on the part of the local tax collecting unit
may file a request for the exemption for those tax years with the department of
treasury. The request for the exemption shall be in a form prescribed by the
department of treasury and shall include all documentation the department of
treasury considers necessary to consider the request and to correct any
affected official records if a qualified error on the part of the local tax
collecting unit is recognized and an exemption is granted. If the department of
treasury denies a request for the exemption under this subsection, the owner is
responsible for all costs related to the request as determined by the
department of treasury. If the department of treasury grants a request for the
exemption under this subsection and the exemption results in an overpayment of
the tax in the years under consideration, the department of treasury shall
notify the treasurer of the local tax collecting unit, the county treasurer,
and other affected officials of the error and the granting of the request for
the exemption and all affected official records shall be corrected consistent
with guidance provided by the department of treasury. If granting the request
for the exemption results in an overpayment, a rebate, including any interest
paid by the owner, shall be paid to the owner within 30 days of the receipt of
the notice. A rebate shall be without interest. The treasurer in possession of
the appropriate tax roll may deduct the rebate from the appropriate tax
collecting unit's subsequent distribution of taxes. The treasurer in possession
of the appropriate tax roll shall bill to the appropriate tax collecting unit
the tax collecting unit's share of taxes rebated. A local tax collecting unit
responsible for a qualified error under this subsection shall reimburse each
county treasurer and other affected local official required to correct official
records under this subsection for the costs incurred in complying with this subsection.
(21) If an owner of property received a principal residence
exemption to which that owner was not entitled in any year before the 3
immediately preceding tax years, as a result of a qualified error on the part
of the local tax collecting unit, the department of treasury may deny the
principal residence exemption as provided in subsection (8). If the department
of treasury denies an exemption under this subsection, the owner shall be
issued a corrected or supplemental tax bill as provided in subsection (8),
except interest shall not accrue until 60 days after the date the corrected or
supplemental tax bill is issued. A local tax collecting unit responsible for a
qualified error under this subsection shall reimburse each county treasurer and
other affected local official required to correct official records under this
subsection for the costs incurred in complying with this subsection.
(22) If the assessor or treasurer of the local tax collecting
unit believes that the department of treasury erroneously denied a claim for
exemption, the assessor or treasurer may submit written information supporting
the owner's claim for exemption to the department of treasury within 35 days of
the owner's receipt of the notice denying the claim for exemption. If, after
reviewing the information provided, the department of treasury determines that
the claim for exemption was erroneously denied, the department of treasury
shall grant the exemption and the tax roll shall be amended to reflect the
exemption.
(23) If granting the exemption under this section results in
an overpayment of the tax, a rebate, including any interest paid, shall be made
to the taxpayer by the local tax collecting unit if the local tax collecting
unit has possession of the tax roll or by the county treasurer if the county
has possession of the tax roll within 30 days of the date the exemption is
granted. The rebate shall be without interest. If an exemption for property
classified as timber-cutover real property is granted under this section for the
2008 or 2009 tax year, the tax roll shall be corrected and any delinquent and
unpaid penalty, interest, and tax resulting from that property not having been
exempt under this section for the 2008 or 2009 tax year shall be waived.
(24) If an exemption under this section is erroneously
granted for an affidavit filed before October 1, 2003, an owner may request in
writing that the department of treasury withdraw the exemption. The request to
withdraw the exemption shall be received not later than November 1, 2003. If an
owner requests that an exemption be withdrawn, the department of treasury shall
issue an order notifying the local assessor that the exemption issued under
this section has been denied based on the owner's request. If an exemption is
withdrawn, the property that had been subject to that exemption shall be
immediately placed on the tax roll by the local tax collecting unit if the
local tax collecting unit has possession of the tax roll or by the county
treasurer if the county has possession of the tax roll as though the exemption
had not been granted. A corrected tax bill shall be issued for the tax year
being adjusted by the local tax collecting unit if the local tax collecting
unit has possession of the tax roll or by the county treasurer if the county
has possession of the tax roll. Unless a denial has been issued before July 1,
2003, if an owner requests that an exemption under this section be withdrawn
and that owner pays the corrected tax bill issued under this subsection within
30 days after the corrected tax bill is issued, that owner is not liable for
any penalty or interest on the additional tax. An owner who pays a corrected
tax bill issued under this subsection more than 30 days after the corrected tax
bill is issued is liable for the penalties and interest that would have accrued
if the exemption had not been granted from the date the taxes were originally
levied.
(25) Subject to subsection (26), interest at the rate of
1.25% per month or fraction of a month collected under subsection (6), (8), or
(11) shall be distributed as follows:
(a) If the assessor of the local tax collecting unit denies
the exemption under this section, as follows:
(i) To the local tax
collecting unit, 70%.
(ii) To the department
of treasury, 10%.
(iii) To the county in
which the property is located, 20%.
(b) If the department of treasury denies the exemption under
this section, as follows:
(i) To the local tax
collecting unit, 20%.
(ii) To the department
of treasury, 70%.
(iii) To the county in
which the property is located, 10%.
(c) If the county treasurer or his or her designee or the
county equalization director or his or her designee denies the exemption under
this section, as follows:
(i) To the local tax
collecting unit, 20%.
(ii) To the department
of treasury, 10%.
(iii) To the county in
which the property is located, 70%.
(26) Interest distributed under subsection (25) is subject to
the following conditions:
(a) Interest distributed to a county shall be deposited into
a restricted fund to be used solely for the administration of exemptions under
this section. Money in that restricted fund shall lapse to the county general
fund on the December 31 in the year 3 years after the first distribution of
interest to the county under subsection (25) and on each succeeding December 31
thereafter.
(b) Interest distributed to the department of treasury shall
be deposited into the principal residence property tax exemption audit fund,
which is created within the state treasury. The state treasurer may receive
money or other assets from any source for deposit into the fund. The state
treasurer shall direct the investment of the fund. The state treasurer shall
credit to the fund interest and earnings from fund investments. Money in the
fund shall be considered a work project account and at the close of the fiscal
year shall remain in the fund and shall not lapse to the general fund. Money
from the fund shall be expended, upon appropriation, only for the purpose of
auditing exemption affidavits.
(27) Interest distributed under subsection (25) is in
addition to and shall not affect the levy or collection of the county property
tax administration fee established under this act.
(28) A cooperative housing corporation is entitled to a full
or partial exemption under this section for the tax year in which the
cooperative housing corporation files all of the following with the local tax
collecting unit in which the cooperative housing corporation is located if
filed within the time period prescribed in subsection (2):
(a) An affidavit form.
(b) A statement of the total number of units owned by the
cooperative housing corporation and occupied as the principal residence of a
tenant stockholder as of the date of the filing under this subsection.
(c) A list that includes the name, address, and social
security number of each tenant stockholder of the cooperative housing
corporation occupying a unit in the cooperative housing corporation as his or
her principal residence as of the date of the filing under this subsection.
(d) A statement of the total number of units of the
cooperative housing corporation on which an exemption under this section was
claimed and that were transferred in the tax year immediately preceding the tax
year in which the filing under this section was made.
(29) Before May 1, 2004 and before May 1, 2005, the treasurer
of each county shall forward to the department of education a statement of the
taxable value of each school district and fraction of a school district within
the county for the preceding 4 calendar years. This requirement is in addition
to the requirement set forth in section 151 of the state school aid act of
1979, 1979 PA 94, MCL 388.1751.
(30) For a parcel of property open and available for use as a
bed and breakfast, the portion of the taxable value of the property used as a
principal residence under subsection (16) shall be calculated in the following
manner:
(a) Add all of the following:
(i) The square
footage of the property used exclusively as that owner's principal residence.
(ii) 50% of the square
footage of the property's common area.
(iii) If the property
was not open and available for use as a bed and breakfast for 90 or more
consecutive days in the immediately preceding 12-month period, the result of
the following calculation:
(A) Add the square footage of the property that is open and
available regularly and exclusively as a bed and breakfast, and 50% of the
square footage of the property's common area.
(B) Multiply the result of the calculation in
sub-subparagraph (A) by a fraction, the numerator of which is the number of
consecutive days in the immediately preceding 12-month period that the property
was not open and available for use as a bed and breakfast and the denominator
of which is 365.
(b) Divide the result of the calculation in subdivision (a)
by the total square footage of the property.
(31) The owner claiming an exemption under this section for
property open and available as a bed and breakfast shall file an affidavit
claiming the exemption within the time period prescribed in subsection (2) with
the local tax collecting unit in which the property is located. The affidavit
shall be in a form prescribed by the department of treasury.
(32) An owner of property who previously occupied that
property as his or her principal residence but now is absent while on active
duty as a member of any branch of the Armed Forces of the United States,
including the Coast Guard, a reserve component of any branch of the Armed
Forces of the United States, or the National Guard, may retain an exemption on
that property if the owner manifests an intent to return to that property by
satisfying all of the following conditions:
(a) The owner continues to own that property while absent on
active duty as a member of any branch of the Armed Forces of the United States,
including the Coast Guard, a reserve component of any branch of the Armed
Forces of the United States, or the National Guard.
(b) The owner has not established a new principal residence.
(c) The owner maintains or provides for the maintenance of
that property while absent on active duty as a member of any branch of the
Armed Forces of the United States, including the Coast Guard, a reserve
component of any branch of the Armed Forces of the United States, or the
National Guard.
(d) That property is not used for any business or commercial
purpose except as provided in section 7dd(c).
(33) If an owner of property who previously claimed and
occupied the property as his or her principal residence has vacated because the
principal residence was damaged or destroyed by an accident, act of God, or act
of another person without the owner's consent, including, but not limited to, a
fire caused by accident, act of God, or act of another person without the
owner's consent, that owner may retain an exemption on that property for not
longer than the tax year during which the damage or destruction occurred and
the immediately succeeding 2 tax years if the owner manifests an intent to
return to that property by satisfying all of the following conditions:
(a) The owner continues to own that property while absent
because of the damage or destruction of the principal residence.
(b) The owner has not established a new principal residence.
(c) The owner provides for the reconstruction of the
principal residence for purposes of occupying it upon its completion as his or
her principal residence.
(d) The property is not occupied, is not leased, and is not
used for any business or commercial purpose.
(34) As used in this section:
(a) "Bed and breakfast" means property classified
as residential real property under section 34c that meets all of the following
criteria:
(i) Has 10 or fewer
sleeping rooms, including sleeping rooms occupied by the owner of the property,
1 or more of which are available for rent to transient tenants.
(ii) Serves meals at
no extra cost to its transient tenants.
(iii) Has a smoke
detector in proper working order in each sleeping room and a fire extinguisher
in proper working order on each floor.
(b) "Business or commercial purpose" means
commercial purpose as that term is defined in section 27a.
(c) "Common area" includes, but is not limited to,
a kitchen, dining room, living room, fitness room, porch, hallway, laundry
room, or bathroom that is available for use by guests of a bed and breakfast
or, unless guests are specifically prohibited from access to the area, an area
that is used to provide a service to guests of a bed and breakfast.
(d) "Qualified error" means that term as defined in
section 53b.
Sec. 53b. (1) If there has been a qualified error, the
qualified error shall be verified by the local assessing officer and approved
by the board of review. Except as otherwise provided in subsection (7), (5), the board of review shall meet for
the purposes of this section on Tuesday following the second Monday in December
and on Tuesday following the third Monday in July. If approved, the board of
review shall file an affidavit within 30 days relative to the qualified error
with the proper officials and all affected official records shall be corrected.
If the qualified error results in an overpayment or underpayment, the rebate,
including any interest paid, shall be made to the taxpayer or the taxpayer
shall be notified and payment made within 30 days of the notice. A rebate shall
be without interest. The treasurer in possession of the appropriate tax roll
may deduct the rebate from the appropriate tax collecting unit's subsequent
distribution of taxes. The treasurer in possession of the appropriate tax roll
shall bill to the appropriate tax collecting unit the tax collecting unit's
share of taxes rebated. Except as otherwise provided in subsection (6) and section
27a(4), a correction under this subsection may be made for the current year and
the immediately preceding year only.
(2) Action pursuant to
subsection (1) may be initiated by the taxpayer or the assessing officer.
(3) The board of review
meeting in July and December shall meet only for the purpose described in
subsection (1) and to hear appeals provided for in sections 7u, 7cc, 7ee, and 7jj. If
an exemption under section 7u is approved, the board of review shall file an
affidavit with the proper officials involved in the assessment and collection
of taxes and all affected official records shall be corrected. If an appeal
under section 7cc, 7ee , or 7jj results in a determination that an
overpayment has been made, the board of review shall file an affidavit and a
rebate shall be made at the times and in the manner provided in subsection (1).
Except as otherwise provided in sections 7cc, 7ee , and
7jj, a correction under this subsection shall be made for the year in which the
appeal is made only. If the board of review approves an exemption or provides a
rebate for property under section 7cc, 7ee , or
7jj as provided in this subsection, the board of review shall require the owner
to execute the affidavit provided for in section 7cc, 7ee , or
7jj. and shall forward a copy of any
section 7cc affidavits to the department of treasury.
(4)
If an exemption under section 7cc is approved by the board of review under this
section, the provisions of section 7cc apply. If an exemption under section 7cc
is not approved by the board of review under this section, the owner may appeal
that decision in writing to the department of treasury within 35 days of the
board of review's denial and the appeal shall be conducted as provided in
section 7cc(8).
(4)
(5) An owner or assessor may appeal a decision of the
board of review under this section regarding an exemption under section 7ee or
7jj to the residential and small claims division of the Michigan tax tribunal.
An owner is not required to pay the amount of tax in dispute in order to
receive a final determination of the residential and small claims division of
the Michigan tax tribunal. However, interest and penalties, if any, shall
accrue and be computed based on interest and penalties that would have accrued
from the date the taxes were originally levied as if there had not been an
exemption.
(6)
A correction under this section that approves a principal residence exemption
pursuant to section 7cc may be made for the year in which the appeal was filed
and the 3 immediately preceding tax years.
(5)
(7) The governing body of the city or township may
authorize, by adoption of an ordinance or resolution, 1 or more of the
following alternative meeting dates for the purposes of this section:
(a) An alternative
meeting date during the week of the second Monday in December.
(b) An alternative
meeting date during the week of the third Monday in July.
(6)
(8) As used in this section, "qualified error"
means 1 or more of the following:
(a) A clerical error
relative to the correct assessment figures, the rate of taxation, or the
mathematical computation relating to the assessing of taxes.
(b) A mutual mistake of
fact.
(c) An adjustment under
section 27a(4) or an exemption under section 7hh(3)(b).
(d) An error of
measurement or calculation of the physical dimensions or components of the real
property being assessed.
(e) An error of omission
or inclusion of a part of the real property being assessed.
(f) An error regarding
the correct taxable status of the real property being assessed.
(g) An error made by the
taxpayer in preparing the statement of assessable personal property under
section 19.
(h) An error made in the denial of a claim of exemption for personal property under section 9o.