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Contact Information:
Edward S. Kisscorni, CPA
290 Suncrest Court, SW
Grandville, MI 49418

Office: 616/233-0667
Cell: 616/443-6730
Fax: 616/233-0667




Friday, May 27 2011

Thousands of Property Tax Classification Appeals Affected

In an appeal of nine consolidated property tax cases, the Michigan Supreme Court ruled that circuit courts have subject matter jurisdiction over appeals from State Tax Commission.   Property classification decisions, because they constitute final decisions that are quasi-judicial and affect private rights, fall within the ambit of Article 6, Section28, of the Michigan Constitution, which guarantees judicial review. The Legislature lacked the authority to abolish the right to judicial review by enacting a statute. As a consequence, the court declared the final sentence of Code Section 211.34c(6) unconstitutional because it denied appeal in the courts of State Tax Commission classification decisions and the Legislature did not provide other means for judicial review of classification decisions.

The Michigan Court of Appeals suggested that a taxpayer could pay the tax and then seek a refund in the Michigan Tax Tribunal. However, nothing in the Tax Tribunal Act granted the Michigan Tax Tribunal jurisdiction over State Tax Commission classification decisions. Moreover, the Tax Tribunal ruled in 2010 that it lacked jurisdiction over State Tax Commission  classification decisions.  As a result of the Tax Tribunal's decision and the Court of Appeals opinion, the taxpayers were left with no forum in which to challenge classification decisions, notwithstanding their constitutional right to judicial review.

Aside from requiring a final quasi-judicial decision that affected private rights, Article 6, Section 28, provided that a decision must be subject to direct review by the courts "as provided by law."  The local assessors and the State Tax Commission argued that "as provided by law" meant that the Legislature had the authority to limit the jurisdiction of the circuit courts. The Michigan Supreme Court, however, held that the phrase "as provided by law" did not grant the Legislature the authority to circumvent the protections that the section guaranteed. If it did, those protections would lose their strength because the Legislature could render the entire provision as mere surplusage.

Midland Cogeneration Venture Limited Partnership v. Naftaly, Michigan Supreme Court, Nos. 140814, 140817, 140818, 140819, 140820, 140821, 140822, 140823, and 140824, May 23, 2011

Posted by: Ed Kisscorni AT 01:19 pm   |  Permalink   |  Email


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