Uncapping of Taxpayer's Property Not Permitted When Dome After the Uncapping Event
In Michigan Properties, LLC v. Meridian Township, Michigan Court of Appeals, Nos. 289174, 289175, and 289176, April 5, 2011, the Michigan Tax Tribunal erred in holding that it was permissible to uncap the taxable values of a taxpayer's real property for the 2007 and 2008 local property tax years when the transfer of ownership of the property occurred in December 2004. The Michigan Court of Appeals acknowledged that the March Board of Review was granted broad statutory power to ensure that the assessment roll complied with the general property tax provisions. However, the court further concluded that while the March Board of Review was permitted to modify the assessed values and tentative taxable values of the property in question, it could not make a modification that would contradict an express property tax provision.The tax year at issue in this case was 2007. Therefore, because the property in question was not transferred in 2006, the unambiguous applicable statutory language provided that the 2007 taxable value was determined by ascertaining the lesser of the property's 2006 taxable value, minus any losses, multiplied by the lesser of 1.05 or the inflation rate, plus all additions and the 2007 state equalized value. The court concluded that if the March Board of Review was statutorily permitted to uncap a property's value for a year that was not immediately subsequent to a year of transfer, the applicable statutory provisions would essentially be rendered meaningless. As a result, taxpayers would be subject to perpetual uncertainty.