Backups at the Tribunal

At a recent luncheon organized by the Real Property Section of the Ingham County Bar Association, Kimball R. Smith, III, Chair of the Michigan Tax Tribunal, gave his “Michigan Tax Tribunal Update.” As we all are aware, real property values in Michigan have significantly decreased in recent years. As one may suspect, the inverse is true of filings with the Michigan Tax Tribunal. For these reasons, I thought I would share some highlights of Mr. Smith’s presentation with our readers.

Smith reminded us that the Michigan Tax Tribunal is an administrative tax court that hears tax appeals for nearly all cases dealing with Michigan taxes. Many of those tax appeals relate to the “true cash value” of property, a concept, which in practice is similar to fair market value. The Tax Tribunal is divided into two divisions. They are the Entire Tribunal and the Small Claims Division. Smith indicated that fiscal years 2009, 2010, and 2011 represent the highest number of cases ever filed with the Entire Tribunal. Specifically,

  • 6,900 cases were filed in 2009;
  • 5,500 cases in 2010; and
  • 4,600 cases were filed in 2011.

In recent years, a high number of cases were also filed with the Small Claims Division. Specifically,

  • 12,083 small claim appeals were filed in 2009;
  • 20,469 in 2010; and
  • as of August 25, 2011, 17,098 cases have been filed this year.

Although the Tax Tribunal is experiencing increased case loads, it continues to be allocated essentially the same level of resources as in previous years. Unfortunately, this has resulted in long delays in bringing tax appeals to decision. For example, the Tax Tribunal only recently started work, other than docketing, on small claims tax appeals filed during the 2010 tax year. However, the Tax Tribunal has taken measures to expedite tax appeals and, under Mr. Smith’s direction, additional measures will be implemented. Although most tax appeals are resolved between the parties before a hearing, the number of decisions entered by the Tax Tribunal has significantly increased in recent years. For example, the Entire Tribunal entered 37 and 81 decisions in years 2008 and 2009, respectively. In 2010, the Entire Tribunal entered 204 decisions and for 2011 through August 25, the Entire Tribunal has entered 172 decisions. With the hiring of hearing referees, many more decisions are being entered by the Small Claims Divisionand almost twice as many appeals were closed by this division in fiscal year 2010 as in fiscal year 2009.

As we look forward to expedited processes at the Tax Tribunal, property tax year 2012 is right around the corner. Assessments will be issued in January and February of next year. Taxpayers should review property tax assessments and contact counsel. Protests may be filed in March and, depending on the property classification, tax appeals must be filed by May 31 or July 31. If a tax appeal is already pending, a subsequent tax year can be added, sometimes automatically, to that appeal.

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