Real Estate Section gets update on Michigan Tax Tribunal

By Roberta M. Gubbins Legal News More than fifty individuals from as far away as Gladwin and from diverse occupations including accountants, real estate brokers and appraisers, bankers, contractors and insurance executives joined the members of the ICBA Real Estate Section on September 28th at the Hall of Fame Café in East Lansing to hear Kimbal R. Smith, III, Tribunal Chair, give an update on new procedures at the Michigan Tax Tribunal. He began with an explanation of the Tax Tribunal, which is "an Administrative tax "court" that hears tax appeals for all Michigan taxes. It has exclusive jurisdiction over all property tax matters except Drain Code Special Assessments, "which are heard in the Ingham County Probate Court. In addition to property tax matters, the Tribunal has concurrent jurisdiction with Court of Claims over other taxes, such as income, sales, small business or Michigan business tax, or withholding and others." "The Tribunal is divided into two divisions: the Entire Tribunal and the Residential Property and Small Claims Division. We have our own Tax Tribunal rules and are subject to the Administrative Procedures Act. We generally follow the Rules of Evidence." Decisions can be appealed to the Court of Appeals. The Tax Tribunal is located in Lansing and is now part of the Michigan Administrative Hearing System under the Department of Licensing and Regulatory Affairs. The Tax Tribunal, a multidisciplinary body, is composed of the following members, all of whom must have at least five years experience in state and local tax matters: * 1 certified public accountant * 1 Level IV assessor * 1 appraiser * 2 attorneys * 2 at-large "Entire Tribunal cases are the larger cases," Smith explained. "These would be the Meijer, Lowes, apartment complexes, basically the larger properties. The docket is a more formal process and cases can run from one day to as long as several weeks." The hearings are presided over by a Tribunal member or Administrative Law Judge and parties are represented by lawyers. "Since about 2007, there has been a severe downturn in property values due to the recesssion." Explaining that the changes in values has led to an increase in appeals, he continued, "when I came to the Tribunal in 2001, we had about 1800 Entire Tribunal appeals in a year, and about 6000 small claims appeals. In 2009 there were about 7500 Entire Tribunal appeals and over 20,000 small claims appeals." "In most of our cases," he emphasized, "the issue is 'what is the true cash value of the property on the valuation date, which, in Michigan, is Dec 31st. Since 1994, you pay your property tax on the taxable value (TV), which is half the true cash value. The key thing is to get an appraisal." In the Entire Tribunal cases, there will be a date set for the filing of the appraisal; about 60 days after that there will be a pre-hearing conference, a trial will be held and decision made. "The one commitment I made to the Governor's office is that folks will get expeditious decisions out of the Michigan Tax Tribunal. Right now we have about 12,000 entire tribunal cases pending. When I took over as Chair in March, we had about 42,000 total pending cases. Right now we are currently at about 32,000 cases and that includes about 11,000 additional cases." Small claims cases include all property classified as "Residential, and Agricultural," income-producing property with less than 4 units, all other classifications of property if the SEV (State Equalized Value) or TV at issue is ²$100,000, non-property tax cases if the amount in dispute is ²$20,000, and special assessment appeals if the amount in dispute is ²$20,000. Small claims hearings, he explained, are user-friendly, informal, are generally 30 minutes in length and are held for parties' convenience within county where property is located or in an adjoining county or telephonically. They are presided over by a Hearing Referee, Administrative Law Judge or Tribunal Member. He emphasized that his "charge is to move these cases," which means they will be "stingy on adjournments" and insist that documents be filed on time. "My goal is to complete small claims cases within 14 months of the filing deadline." For more information on Michigan Tax Tribunal: www.michigan.gov/taxtrib Kimbal R. Smith, III, graduated from Detroit College of Law. He has served as Ionia City Attorney, State Treasurer for Michigan, has taught as an adjunct professor for Thomas M. Cooley Law School. Published: Mon, Oct 10, 2011

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