HB-5261, As Passed Senate, April 17, 2018

SUBSTITUTE FOR

HOUSE BILL NO. 5261

     A bill to amend 1893 PA 206, entitled

"The general property tax act,"

by amending section 9o (MCL 211.9o), as amended by 2017 PA 261.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 9o. (1) Beginning December 31, 2013, eligible personal

property for which an exemption has been properly claimed under

this section is exempt from the collection of taxes under this act.

     (2) An owner of eligible personal property shall claim the

exemption under this section by annually filing a statement with

the local tax collecting unit in which the eligible personal

property is located not later than February 20 in each tax year of

the first year the exemption is claimed or, if February 20 of the

first year the exemption is claimed is a Saturday, Sunday, or legal

holiday, not later than the next day that is not a Saturday,

Sunday, or legal holiday. For purposes of a statement delivered by

the United States Postal Service, the filing is timely if the

postmark date is on or before the filing deadline prescribed in

this subsection. If the statement is not timely filed with the

local tax collecting unit, a late submission may be filed directly

with the March board of review before its final adjournment by

submitting the statement prescribed in this subsection. The board

of review shall not accept a filing after adjournment of its March

meeting. An appeal of a denial by the March board of review may be

made by filing a petition with the Michigan tax tribunal within 35

days of the denial notice. A statement filed under this subsection

shall be in a form prescribed by the state tax commission and shall

include any address where any property owned by, leased to, or in

the possession of that owner or a related entity is located within

that local tax collecting unit. The statement shall require the

owner to attest that the combined true cash value of all industrial

personal property and commercial personal property in that local

tax collecting unit owned by, leased to, or in the possession of

that owner or a related entity on December 31 of the immediately

preceding year is less than $80,000.00.

     (3) If a statement claiming the exemption under this section

is filed as provided in subsection (2), the owner of that eligible

personal property is not required to file a statement under section

19.

     (4) A person who claims an exemption for eligible personal

property under this section shall maintain books and records and

shall provide access to those books and records as provided in

section 22. A local unit of government may develop and implement an

audit program that includes, but is not limited to, the audit of

all information submitted under subsection (2) for the current

calendar year and the 3 calendar years immediately preceding the

commencement of an audit. Any assessment as a result of an audit

must be paid in full within 35 days of issuance and must include

interest as described in subsection (5).

     (5) An exemption granted under this section remains in effect

until the personal property is no longer eligible personal

property. An owner whose personal property is no longer eligible

personal property shall file by February 20 of the year that the

property is no longer eligible a rescission and the statement

required under section 19. The rescission shall be filed on a form

prescribed by the department of treasury. Upon receipt of a

rescission form, the local assessor shall immediately remove the

exemption. An owner who fails to file a rescission and whose

property is later determined to be ineligible for the exemption

will be subject to repayment of any additional taxes with interest

as described in this subsection. Upon discovery that the property

is no longer eligible personal property, the assessor shall remove

the exemption of that personal property and, if the tax roll is in

the local tax collecting unit's possession, amend the tax roll to

reflect the removal of the exemption, and the local treasurer shall

within 30 days of the date of the discovery issue a corrected tax

bill for any additional taxes with interest at the rate of 1% per

month or fraction of a month and penalties computed from the date

the taxes were last payable without interest or penalty. If the tax

roll is in the county treasurer's possession, the tax roll shall be

amended to reflect the removal of the exemption and the county

treasurer shall within 30 days of the date of the removal prepare

and submit a supplemental tax bill for any additional taxes,

together with interest at the rate of 1% per month or fraction of a

month and penalties computed from the date the taxes were last

payable without interest or penalty. Interest on any tax set forth

in a corrected or supplemental tax bill again begins to accrue 60

days after the date the corrected or supplemental tax bill is

issued at the rate of 1% per month or fraction of a month. Taxes

levied in a corrected or supplemental tax bill shall be returned as

delinquent on the March 1 in the year immediately succeeding the

year in which the corrected or supplemental tax bill is issued.

(6) (5) If the assessor of the local tax collecting unit

believes that personal property for which a statement claiming an

exemption is timely and properly filed under subsection (2) is not

eligible personal property, the assessor may deny that claim for

exemption by notifying the person that filed the statement in

writing of the reason for the denial and advising the person that

the denial may be appealed to the board of review under section 30

during that tax year. The assessor may deny a claim for exemption

for the current year and for the 3 immediately preceding calendar

years. If the assessor denies a claim for exemption, the assessor

shall remove the exemption of that personal property and, if the

tax roll is in the local tax collecting unit's possession, amend

the tax roll to reflect the denial and the local treasurer shall

within 30 days of the date of the denial issue a corrected tax bill

for any additional taxes with interest at the rate of 1% per month

or fraction of a month and penalties computed from the date the

taxes were last payable without interest or penalty. If the tax

roll is in the county treasurer's possession, the tax roll shall be

amended to reflect the denial and the county treasurer shall within

30 days of the date of the denial prepare and submit a supplemental

tax bill for any additional taxes, together with interest at the

rate of 1% per month or fraction of a month and penalties computed

from the date the taxes were last payable without interest or

penalty. Interest on any tax set forth in a corrected or

supplemental tax bill shall again begin to accrue 60 days after the

date the corrected or supplemental tax bill is issued at the rate

of 1% per month or fraction of a month. Taxes levied in a corrected

or supplemental tax bill shall be returned as delinquent on the

March 1 in the year immediately succeeding the year in which the

corrected or supplemental tax bill is issued.

(7) (6) If a person fraudulently claims an exemption for

personal property under this section, that person is subject to the

penalties provided for in section 21(2).

(8) (7) As used in this section:

     (a) "Commercial personal property" means personal property

that is classified as commercial personal property under section

34c or would be classified as commercial personal property under

section 34c if not exempt from the collection of taxes under this

act under this section or section 9m or 9n.

     (b) "Control", "controlled by", and "under common control

with" mean the possession of the power to direct or cause the

direction of the management and policies of a related entity,

directly or indirectly, whether derived from a management position,

official office, or corporate office held by an individual; by an

ownership interest, beneficial interest, or equitable interest; or

by contractual agreement or other similar arrangement. There is a

rebuttable presumption that control exists if any person, directly

or indirectly, owns, controls, or holds the power to vote, directly

or by proxy, 10% or more of the ownership interest of any other

person or has contributed more than 10% of the capital of the other

person. Indirect ownership includes ownership through attribution

or through 1 or more intermediary entities.

     (c) "Eligible personal property" means property that meets all

of the following conditions:

     (i) Is industrial personal property or commercial personal

property.

     (ii) The combined true cash value of all industrial personal

property and commercial personal property in that local tax

collecting unit owned by, leased to, or in the possession of the

person claiming an exemption under this section or a related entity

on December 31 of the immediately preceding year is less than

$80,000.00.

     (iii) Is not leased to or used by a person that previously

owned the property or a person that, directly or indirectly,

controls, is controlled by, or is under common control with the

person that previously owned the property.

     (d) "Industrial personal property" means personal property

that is classified as industrial personal property under section

34c or would be classified as industrial personal property under

section 34c if not exempt from the collection of taxes under this

act under this section or section 9m or 9n.

     (e) "Person" means an individual, partnership, corporation,

association, limited liability company, or any other legal entity.

     (f) "Related entity" means a person that, directly or

indirectly, controls, is controlled by, or is under common control

with the person claiming an exemption under this section.