One of AAM’s top priorities is to find solutions to the backlog of property tax appeals before the Michigan Tax Tribunal. While there are a number of issues contributing to this backlog, one of the most frustrating is the interest rate applied to refunds. Currently about 1 percent, this low rate paid on refunds is an incentive for governmental units to delay case resolution.
Compounding the problem is the wide disparity between the interest rate applied to refunds versus delinquencies. Late property tax payments can incur interest charges as high as 18 percent, creating a fundamental fairness issue. AAM’s solution to this problem is embodied in House Bill 5340, recently introduced by Rep. Jud Gilbert (R-81st District) and referred to the House Committee on Tax Policy. HB 5340 amends the Tax Tribunal Act so that the interest rate on refunds after December 31, 2011 would be 3 percentage points above the adjusted prime rate (this is the average prime rate quoted by not less than 3 commercial banks and determined by the Department of Treasury). Successful enactment of this legislation would create a floating interest rate which, although not equal to the interest rate on delinquencies, will help to close the fairness gap and speed the resolution of appeals. AAM is partnering with the Michigan Chapter of the International Council of Shopping Centers in this legislative effort, and is in the process of seeking support from a number of other business trade associations. Our thanks to Rep. Gilbert for sponsoring this important legislation. Please watch your e-mail for “Calls to Action” as this bill progresses through the legislature.
Court Grants Leave to Appeal & AAM Amicus Filing in Northfield Estates Case
The Michigan Court of Appeals will hear an important appeal to a Michigan Tax Tribunal decision affecting property owners. Along with the order granting the application for leave to appeal, the court also granted the motion of AAM, Building Owners & Managers Association, Michigan Chamber of Commerce and Michigan Retailers Association for leave to file an amicus curiae brief. In this case, the Tax Tribunal issued an opinion that destroys the statutory mandate that transferred properties be assessed “using the same valuation method used to value all other property of the same classification.” If transferred properties are allowed to be valued unfairly and excessively relative to other properties, it would decrease investment in Michigan and result in a further depression of real estate values. AAM will keep you apprised of the status of this case as it progresses.