Legislative Update

Written by Forrest Wall, CAE, Staff Vice President and Industry Relations

Proposal to Change Property Tax Formula for Rental Property Resurface

For the past several years AAM has worked in concert with other rental property groups on legislation stemming from a 2002 Michigan Supreme Court decision regarding commercial rental property tax valuation. Under the General Property Tax Act the terms “losses” and “additions” include decreases and increases in a property’s occupancy rate. In WPW Acquisition v. City of Troy, the Michigan Supreme Court held that an increase in taxable value attributable to an increase in a property’s occupancy was unconstitutional. Because the decision did not address decreases in taxable value due to occupancy declines, there was an attempt to provide a legislative solution to clarify the issue. Initially, the legislative proposal focused on simply eliminating occupancy as a part of the formula. An alternative idea was then proposed to exempt commercial rental property from general ad valorem property taxes and create a specific tax for commercial rental property which would include occupancy in the tax formula. The discussion on this proposal resurfaced in this legislative session with the introduction of House Bill 4602, which follows the initial proposal to remove occupancy from the formula as of a certain date. Testimony will take place on this legislation before the House Tax Policy Committee, and AAM will keep you apprised of further developments.

Support AAM-PAC Today
In the era of term limits, AAM’s role in educating our current and future legislators about rental housing issues has never been more important. Some of the issues AAM is working on in the 2011-2012 session include:

  • Business Tax Reform  (Completed via MBT Repeal/6% C-corp income tax)
  • Apartment Inspection Law Reform
  • Opposition to Rent Control Proposals
  • Tax Tribunal Speed

AAM needs your help to financially support those elected officials who understand the important role of rental housing in Michigan’s economy. AAM is able to provide this financial assistance through its Political Action Committee, called AAM-PAC. Remember, AAM-PAC contributions must be made via personal, partnership, or LLP check or credit cards. Please contact me at 248-862-1004 to make your contribution today!

This entry was posted in July 2011. Bookmark the permalink.