The Michigan Tax Tribunal did not err in ruling that a corporation's appraisal of its properties for local Michigan Property Tax assessment purposes lacked credibility. (Inn At Watervale, Inc. v. Township of Blaine, Michigan Court of Appeals, No. 289869, May 20, 2010) However, the Tax Tribunal did err in failing to make an independent determination of the true cash value of the properties and erred in failing to base its decision on competent, material, and substantial evidence.
In its ruling, the Tax Tribunal outlined the applicable appraisal methodology to be used in a situation where a conservation easement had been granted on property to be assessed as found in Indian Garden Group, 1995 WL 901434 (1995), and determined that the corporation did not provide the necessary evidence. The Indian Garden Group decision was declared precedential by the Tax Tribunal with respect to the valuation methodology of a property that was encumbered by an easement.
In this case, the corporation's appraiser generated a before-value and an after-value appraisal in 2003 and merely updated the after-value appraisal to account for economic conditions as of December 31, 2005. However the Tax Tribunal's decision in Indian Garden Group mandated that the applicable appraisal methodology be used to determine the true cash value of a property that was encumbered by an easement as of each relevant tax date in contention. The Indian Garden Group opinion stated that the value of the property was to be determined on a year-by-year basis according to the applicable and available market evidences. Therefore, the Tax Tribunal was correct in finding that the corporation's attempt to provide a before-value appraisal from 2003 with merely updated values as of December 31, 2005, did not satisfy the appraisal methodology outlined in Indian Garden Group for the relevant tax date.
Although the Tax Tribunal's decision was correct that the corporation's appraisal was unreliable, the Tax Tribunal failed to meet the requirement that it make an independent determination of the true cash value of the corporation's property. It acknowledged that the township assessor's values were somewhat incorrect, but nevertheless it adopted those exact values as the corporation's true cash value. The Tax Tribunal had a duty to make its own determination of true cash value and not merely affirm the value of the assessing authority. If the Tax Tribunal did not have adequate evidence to make a determination, then it could have sought additional data from the parties.