Justia Tax Law Opinion Summaries

Baruch SLS, Inc., a Michigan nonprofit corporation, sought exemptions from real and personal property taxes as a charitable institution under MCL 211.7o and MCL 211.9 for tax years 2010–2012. Petitioner based its request on the fact that it offered an income-based subsidy to qualifying residents of Stone Crest Assisted Living, one of its adult foster care facilities, provided those residents had made at least 24 monthly payments to petitioner. The Tax Tribunal ruled that Stone Crest was not eligible for the exemptions because petitioner did not qualify as a charitable institution under three of the six factors set forth in Wexford Med Group v City of Cadillac, 474 Mich 192 (2006). The Court of Appeals reversed with respect to two of the Wexford factors, but affirmed the denial of the exemptions on the ground that petitioner had failed to satisfy the third Wexford factor because, by limiting the availability of its income-based subsidy, petitioner offered its services on a discriminatory basis. The Michigan Supreme Court found the third factor in the Wexford test excluded only restrictions or conditions on charity that bore no reasonable relationship to a permissible charitable goal. Because the lower courts did not consider Baruch’s policies under the proper understanding of this factor, the Court vacated the Court of Appeals’ and Tax Tribunal’s opinions in part and remanded this case to the Tax Tribunal for further proceedings. View "Baruch SLS, Inc. v. Twp of Tittabawassee" on Justia Law

The Tax Tribunal erred by concluding that MCL 211.7n, a statute specifically exempting from taxation the real or personal property owned and occupied by nonprofit educational institutions, controlled over the more general statute, MCL 211.9(1)(a), which authorized a tax exemption for educational institutions without regard to the institution’s nonprofit or for-profit status. SBC Health Midwest, Inc., challenged the city of Kentwood’s denial of its request for a personal property tax exemption in the Tax Tribunal. SBC Health, a Delaware for-profit corporation, had requested a tax exemption under MCL 211.9(1)(a) for personal property used to operate the Sanford-Brown College Grand Rapids. The Michigan Supreme Court held the nonprofit requirement in MCL 211.7n did not negate a for-profit educational institution like SBC Health from pursuing an exemption under MCL 211.9(1)(a). The tax exemption outlined in the unambiguous language in MCL 211.9(1)(a) applies to all educational institutions, for-profit or nonprofit, that meet the requirements specified in MCL 211.9(1)(a). View "SBC Health Midwest, Inc. v. City of Kentwood" on Justia Law

The Supreme Court combined several taxpayers' appeals for the purpose of this opinion. In each, taxpayers owned two (or more) separate S-corporations, and attributed profits and losses from each businesses to their Michigan tax returns, arguing that the multiple businesses were unitary corporations. In each case, plaintiffs owned a Michigan company and a foreign company, but combined the profits and losses from both for credits on their Michigan returns. The Department of the Treasury disallowed the unitary classification. The Supreme Court held that under Michigan tax law, individual taxpayers may combine the profits and losses from unitary flow-through businesses and then apportion that income on the basis of those businesses’ combined apportionment factors. View "Malpass v. Dept. of Treasury" on Justia Law

Hillsdale County Senior Services, Inc. (HCSS) filed an action against Hillsdale County, seeking mandamus to enforce the terms of a property-tax ballot proposition that provided for the levy of an additional 0.5 mill property tax in Hillsdale County to fund HCSS. The Hillsdale County voters approved the proposition in 2008 to raise funds for the provision of services to older persons by HCSS. Defendant entered into a contract with HCSS from January 1, 2009 through December 31, 2010, but did not levy and spend the full, voter-approved, 0.5 mill. The circuit court granted plaintiffs' writ for mandamus and ordered defendant to levy the entire 0.5 mill for the length of time approved by the voters. In an unpublished opinion, the Court of Appeals reversed the order, concluding that the circuit court lacked subject-matter jurisdiction over the case because the Tax Tribunal had exclusive and original jurisdiction over the matter. HCSS appealed, and the Supreme Court, after its review, agreed that the circuit court lacked subject-matter jurisdiction. Accordingly the Court of Appeals was affirmed. View "Hillsdale County Senior Services Center v. Hillsdale County" on Justia Law

The issue in these consolidated cases involved interpretation of the General Property Tax Act. For this case, the Supreme Court addressed whether the Tax Tribunal has the authority to reduce an unconstitutional increase in the taxable value of property when the erroneous taxable value was not challenged in the year of the increase. Upon review, the Supreme Court held that the Tax Tribunal does have the authority to reduce an unconstitutional previous increase in taxable value for purposes of adjusting a taxable value that was timely challenged in a subsequent year. "The Tax Tribunal Act sets forth the Tax Tribunal's jurisdiction[;] once [. . .] properly invoked, the Tax Tribunal possesses the same powers and duties as those assigned to a March board of review under the GPTA, including the duty to adjust erroneous taxable values to bring the current tax rolls into compliance with the GPTA." Because the Court of Appeals erroneously held that the Tax Tribunal did not have jurisdiction to review taxable values in years not under appeal, the Supreme Court reversed the Court of Appeals' judgment and remanded the case back to that Court to consider Northville Township's remaining issues on appeal regarding the Tax Tribunal's valuation of the properties. View "Toll Northville Limited Partnership v. Township of Northville" on Justia Law

The issue in these consolidated cases involved interpretation of the General Property Tax Act. For this case, the Supreme Court addressed whether the tax assessor's failure to adjust the taxable value of a parcel of real property in the year immediately following its transfer precluded a March board of review from adjusting the taxable value in a later year. Upon review, the Court held that the failure to adjust the taxable value in the year immediately following the transfer produced an erroneous taxable value because the taxable value was not in compliance with the GPTA. Further, the GPTA did not preclude a March board of review from correcting an erroneous taxable value that resulted from the failure of an assessor to adjust a property's taxable value in the year immediately following its transfer. Accordingly, the Court also held that a March board of review may adjust the erroneous taxable value in a subsequent year in order to bring the current taxable value into compliance with the GPTA. The Court of Appeals held that the error in this case could not be remedied and, therefore, the Supreme Court reversed the judgment of the Court of Appeals and reinstated the Michigan Tax Tribunal's decision affirming the March board of review's correction of the tax rolls to reflect the properly adjusted taxable values. View "Michigan Properties, LLC v. Meridian Twp" on Justia Law

The Supreme Court consolidated nine separate cases for review. In each, Plaintiffs own property that was subject to state property taxes. Each Plaintiff described the property as âmachinery and equipment.â For the 2008 tax year, the local assessors classified the property for tax-assessment purposes as âindustrial real propertyâ or âcommercial personal property.â Plaintiffs petitioned the relevant boards-of-review to reclassify the property as âindustrial personal property.â That reclassification would permit them to take advantage of recently enacted tax exemptions or credits. In each case, the board denied the request. Plaintiffs then petitioned the State Tax Commission (STC) to reclassify the property. In each case, the STC denied the requests. Plaintiffs then sought and obtained relief in various state circuit courts. The STC appealed to the Court of Appeals, and the court reversed each of the circuit court judgments. The appellate court held that state law barred an appeal of the STC classifications to any state court. Plaintiffs appealed to the Supreme Court, to ask whether the circuit courts have jurisdiction to hear appeals of STC classification decisions. The Supreme Court found the state legislature has not provided for other means for judicial review of STC classification decisions. Accordingly, the Court held that the circuit courts do have jurisdiction over appeals from the STC.