Public Service Improvements Unconstitutionally Increased Taxable Value
In Koetje Builders & Developers, L.L.C. v. Township of Georgetown, Michigan Court of Appeals, No. 303220, December 4, 2012, the Court of Appeals ruled the Michigan Tax Tribunal had jurisdiction to deduct an unconstitutional increase in the taxable values of a company's residential properties that was attributable to public service improvements for the property tax years in which the company filed a timely challenge because the Tax Tribunal had the authority and duty to correct a previous erroneous taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year.
The Michigan Court of Appeals noted that in Mich Props, LLC v. Meridian Twp, 817 N.W. 2d 548 (2012), the Michigan Supreme Court held that the Tax Tribunal had jurisdiction over challenges to taxable values such as the one raised by the company in this case in order to bring the taxable value of property back into compliance with the general property tax provisions. In particular, the Michigan Supreme Court held that the taxpayer could seek a recalculation of the taxable value of its properties in the years that it did timely appeal, and that the basis for seeking this recalculation could be an error made in the year prior to the challenge.The appellate court noted that the general rule was that judicial decisions were to be given complete retroactive effect. It was apparent that the decision from Mich Props, LLC was not intended to have prospective-only effect because the Michigan Supreme Court applied the holding from the case to the parties involved in that case. Therefore, the appellate court concluded that when courts announce a rule and apply the rule in that case, it was clear that the rule did not apply only prospectively.