Tax Tribunal Has Authority to Reach Back and Correct Prior Year Unconstitutional Increases
In Summit Development Group, Inc. v. City of Battle Creek, Michigan Court of Appeals, No. 307773, October 23, 2012, the Michigan Court of Appeals held that the Tax Tribunal should not have affirmed the 2008 and 2009 taxable values of a parcel of property because the Tax Tribunal had the authority to reduce an unconstitutional previous increase in the taxable value of the property for the 2007 property tax year for purposes of adjusting the taxable values that were timely challenged in 2008 and 2009.
In this case, the 2007 taxable values were used as a starting point for the 2008 and 2009 taxable values, and the taxpayer wanted the Tax Tribunal to reach back to 2007, a year not under review, and remove the unconstitutional public-infrastructure improvements made by the taxpayer from the assessments for 2007 and onwards. The Michigan Court of Appeals noted that, at the time of the Tax Tribunal's decision, it did not have the benefit of the Michigan Supreme Court's decision in Michigan Properties, LLC v. Meridian Twp, 817 N.W. 2d 548 (2012), in which the court held that the Tax Tribunal did have the authority to reduce an unconstitutional previous increase in taxable values.
The taxpayer also contended that it should be entitled to challenge the taxable values for 2007, despite its untimely challenge of them, because the 2007 notices of assessment were not timely delivered to the taxpayer and a due process violation occurred. The appellate court held that if the taxpayer could prove that the 2007 notices were not received and the city had knowledge of that fact, then the failure of the city to take further action may have given rise to a due process violation. However, there was a dearth of evidence that the 2007 notices were sent to the wrong address or that the notices as sent were undeliverable.