Michigan Tax Tribunal - Property Tax Appeals Process

1. Department of Labor & Economic GrowthDavid C. Hollister, Director Michigan Tax Tribunal Jack VanCoevering, Chair The Tax Tribunal Small Claims Division Process – Property Tax Appeals (USE SCROLL BAR AT RIGHT TO GO TO NEXT SLIDE)

2. First, what is the Michigan Tax Tribunal? The Michigan Tax Tribunal is a tax court. As a tax court, there are certain procedures to follow that will lead to a hearing before an Administrative Law Judge or a Tribunal Member. The Tribunal is not part of the Michigan Department of Treasury, nor is it affiliated with any local or county government.

3. Who are the judges? “Tribunal Members" are individuals appointed by the governor as a Tribunal Judge. “Administrative Law Judges” are classified state employees. Both Administrative Law Judges and Tribunal Members may hear Small Claims appeals. The only difference is that a Tribunal Member’s decision is final and not subject to a rehearing.

4. What kind of taxes can be appealed at the Tribunal? • Valuation (property): This involves your property’s true cash value, assessed value and/or taxable value. • This presentation will go through the property tax (valuation) appeal process only. Other presentations will be available on the Tax Tribunal web site in the near future. • Non-property: This is income tax, single business tax, sales tax, or any tax that is not property related. • Principal Residence and/or Qualified Agricultural Exemption: This involves the denial of your principal residence or qualified agricultural exemption. • Special Assessment: This involves the levy of a special assessment on your property. An example would be a special assessment levied for street paving or sidewalk repairs, etc.

5. What you will learn through this presentation. • Summary of Tribunal Small Claims hearing process for property cases. • Important deadlines and due dates. • Tribunal address, phone number, fax number & web site.

6. The Tax Tribunal Rules for the Small Claims Division Like other courts, the Tribunal’s Small Claims Division has rules that govern the practice and procedure within the Small Claims Division. The rules are based on the statutory authority (the law) provided to the Tribunal by the Tax Tribunal Act (MCL 205.701 et seq). The complete rules and Act can be found on the Tribunal’s web site. What really happens at the Tax Tribunal? Scroll to the next screen and let’s find out!

7. Requirements to start a property (valuation) appeal with the Tribunal. • March Board of Review: If you are requesting to appeal your Taxable Value (TV), State Equalized Value (SEV) and/or True Cash Value (TCV) you MUST first protest the assessment at the March Board of Review (BOR) at your local unit of government (city or township). If you do not protest the current year at the March BOR, the Tribunal may not have jurisdiction over your appeal. Contact your local unit of government for information concerning how to protest at your local March Board of Review. The Tribunal is not part of the Board of Review process.

8. Requirements, cont. • When you are notified of a denial of your protest at the local BOR and you wish to further pursue your protest, the next step will be to appeal at the Tax Tribunal. The Tribunal is not connected in any way with the local boards of review that occur throughout the state. The Tribunal will not know about your values or the reason for the denial of your protest at the BOR.

9. How to start an appeal with the Tax Tribunal • You may start an appeal with the Tax Tribunal by one of the following methods: • Write a letter to the Tribunal, and we will send you a Petition form, OR • Go to the Tribunal’s web site and use our “fillable” form. “Fillable” form means you can complete the fields on the web form and then print the form out, or you may print the blank form out and then complete it. Whichever you choose, you must mail the completed form to the Tribunal. • The appeal letter or the fillable petition form starts the appeal process with the Tribunal. DO NOT do both a letter of appeal and a fillable petition form as a duplication may occur and can delay your appeal process.

10. Property Small Claims (SC) • In your letter indicate parcel ID number, the local unit of government and the type of appeal you wish to process. If you are using a fillable form, please complete all fields on the form. Be careful to read all instructions given on the form. Mail your letter or your completed fillable form to the Tribunal. • The letter of appeal or the completed fillable form must be postmarked on or before June 30th of the tax year at issue. If June 30th falls on a holiday or weekend, the next business day would be the final date to file the appeal letter. NOTE: No faxed letters or forms can be accepted.

11. Processing the Property SC appealletter • The Tribunal will enter the appeal letter on its automated system and assign a docket number. You can search the Tribunal’s web site at “Docket Card Look-Up” to see if your appeal letter was received, by using the name search to locate the docket number that has been assigned. The docket number assigned will stay with your appeal throughout the entire process. • After your appeal letter has been reviewed and it has been determined that the Tribunal has jurisdiction, the Tribunal will send you a petition form to complete. The petition form must be completed and returned by the due date indicated on the form. If the petition form is NOT returned by the due date or is received after the due date, your appeal may be dismissed! SC Property appeal letter continued next slide

12. Processing the Property SC appeal letter continued • The Tribunal will send a cover letter with line-by-line instructions with the petition form to assist you in the completion of your petition form. If you need assistance calculating the appropriate filing fee, please use the fee calculator on the Tribunal’s web site. You may always call the Tribunal if you have questions concerning the completion of the form. Although the Tribunal staff is prohibited by law from giving technical assistance regarding the actual appeal content, staff can assist you in understanding the process. Please read ALL the instructions thoroughly regarding the completion of the petition form. • When the Tribunal receives your completed petition form, the Tribunal will use the U.S. Postal Service postmark on the envelope to verify if it was received by the due date. Remember, if the Tribunal does not receive your completed petition form by the due date on the form, your appeal may dismissed.

13. Processing a property fillableform:no appeal letter necessary • Complete the fillable form from the Tribunal’s web site. You may print the blank form off the web site and then complete it or complete the form while it is still on the web and then print it out and mail to the Tribunal on or before June 30 of the tax year at issue. The Tribunal will use the U.S. postmark to determined that the form was mailed on June 30. If June 30th falls on a holiday or weekend, the next business day would be the final date to file the completed form. For assistance in calculating the appropriate filing fee for your appeal or for assistance in completing the fillable form, see the Tribunal’s web site’s fee calculator and line-by-line instructions for completing the fillable form. SC Property fillable form continued next slide

14. Processing a property fillableform continued • You can always call the Tribunal if you should have questions concerning the completion of the form. Although the Tribunal staff is prohibited by law from giving technical assistance regarding the actual appeal content, staff can assist you in understanding the process as a whole. • The Tribunal will send you a “Notice of Docket” letter after receiving the completed fillable form. This notice will tell you what the docket number is for your appeal. This “Notice of Docket” letter will be your confirmation that your completed fillable petition form has been received. You may also go to the Tribunal’s web site at “Docket Card Look-Up” to see if your completed fillable form has been received.

15. Processing the SC Completed Petition Form (including fillable form) • The Tribunal will review your completed petition form for timeliness, completion, fees, & content. For assistance in calculating the appropriate fee for your appeal, see the Tribunal’s web site fee calculator or refer to the cover letter and line-by-line instructions that were included if you received your petition form in the mail from the Tribunal. Remember to submit the original completed form with attachments and a second copy of the form with attachments. Keep a third copy for your records. • If the petition form is incomplete or if it is not understandable, the Tribunal will issue a “defect” by returning a copy of your petition form with a letter explaining what needs to be corrected. You will have 21 days to respond to the defect notice. If the defect notice is not answered within 21 days, the appeal may be defaulted.

16. DEFAULTS When a Petitioner or Respondent does not comply with a Tribunal order or rule, they may be placed in default. The Tribunal will issue a default order and both parties will receive a copy. ONLY the party in default must correct the default, by filing a motion to set aside the default, providing a proof of service that a copy of the motion to set aside was sent to the opposing party, and paying a $25 motion fee. The fee is not required if the property at issue has at least a 50% principal residence exemption for the year(s) at issue. Defaulting can happen at any time during the appeal process.

17. Processing the Valuation SC Answer Form • Once the Tribunal has received the completed petition form, the Tribunal sends an answer form with a copy of the completed petition form, with attachments, to the assessor of the local unit of government (Respondent). Respondent must return the completed answer form by the due date noted on the answer form. If the Respondent fails to return the completed answer form by the due date noted on the form, Respondent will be placed in default. (See previous screen titled “Defaults”) • If the answer form is incomplete or if it is not understandable, Respondent may by defected. (See previous screen titled “Defaults”) SC Property appeal answer form continued next slide

18. Processing the SC Answer Form continued • If the local unit of government is the petitioner, then the answer form would be sent to the individual or entity responsible for the payment of the taxes. • The Tribunal will review the answer form for completion, timeliness, and content. • The appeal will be ready for the scheduling of a Small Claims hearing when the Tribunal has the completed petition and answer form.

19. OK, now that… • Petitioner has been to the BOR…and • Petitioner has written and mailed a letter of appeal to the Tribunal OR • Petitioner has completed the petition form (including fillable forms) and mailed it to the Tribunal in a timely manner…and • Respondent has completed the answer form and mailed it to the Tribunal in a timely manner, the next step is…

20. Scheduling a Small Claims Hearing • The Tribunal will schedule a Small Claims hearing in the county where the property at issue is located or an adjoining county. The hearing is NOT scheduled in the county where the Petitioner lives if the property at issue is located elsewhere. Neither party will be required to travel more than 100 miles from where the property is located. • The Small Claims hearing will be approximately 30 minutes in length. • A “Notice of Hearing” will be mailed to the parties approximately 30 to 45 days in advance of the scheduled hearing date, although on rare occasions the Tribunal can schedule as little as 14 days prior to the hearing date. Please read the “Notice of Hearing” very carefully.

21. Notice of Hearing • The Notice of Hearing contains very important information. • The date, time and address of the hearing. • How to withdraw your appeal or stipulate (settlement agreement). • Information regarding documentary evidence to be submitted (not less than 14 days prior to the scheduled hearing date). • How to request to have your appeal heard “on the file” if Petitioner or Respondent can’t attend the hearing. • How to request an adjournment (postponing) of the hearing. • Special accommodations requests (persons with disabilities). This will be the only notification of the scheduled hearing date that the parties will receive.

22. What happens at the SC hearing? • The Administrative Law Judge or Tribunal Member will verify basic assessment information and swear in all parties (and observers) for the hearing. • The petitioner presents its case. The petitioner has the burden of proof in establishing the true cash value of the property on the assessment date. All documentary evidence must have been submitted at least 14 days prior to the scheduled hearing date. • The respondent presents its case. The assessor has the burden of proof in establishing the ratio of average level of assessments in relation to true cash value in the assessment district and that the equalization factor was uniformly applied.

23. Conduct at Hearing COME PREPARED!!!!! • Be sure that any documentary evidence has been submitted to the Tribunal AND a copy sent to the opposing party no less than 14 days prior to the hearing. • Be on time! Don’t wait until the day of the hearing to find out how to find the hearing site. If you are unsure of where the hearing site is, call the COUNTY EQUALIZATION DEPARTMENT in the county in which the hearing is scheduled. The Tribunal does not have specific directions to the hearing site. • Conduct yourself with decorum. Remember, this is a hearing before a judge. • If Petitioner fails to show up at the hearing, the appeal can be dismissed. • If Respondent fails to show up at the hearing, the hearing will continue without them.

24. Tribunal Decisions The Administrative Law Judge (ALJ) is required to submit a proposed Opinion & Judgment to the Tribunal within 60 days after the scheduled hearing. The Opinion and Judgment is based upon the applicable laws and evidence and testimony provided at the hearing. That proposed Opinion & Judgment is reviewed by their supervising Tribunal Member. With the approval of their supervising Tribunal Member, the Opinion & Judgment is entered on the Tribunal’s automated system and mailed to all parties and any other parties having a financial interest in the outcome of the hearing, i.e. school districts, county equalization, etc. If either party disagrees with an Opinion & Judgment issued by an ALJ, they can request a rehearing.

25. SC Rehearings Sometimes a party may believe that the Opinion and Judgment is inaccurate. Either party may request a rehearing or reconsideration of an Opinion and Judgment issued by an Administrative Law Judge, but a decision by a Tribunal Member is FINAL. To request a rehearing: • Submit a written request to the Tribunal. • The request must be filed within 20 days of the entry of the Opinion & Judgment. • A copy of the request MUST be served on the opposing party and proof of that service must also be filed with your rehearing request to the Tribunal. • A $25 filing fee is required with the rehearing request unless the property at issue has at least a 50% principal residence exemption. SC Rehearings continued next slide

26. SC Rehearings continued • The written request must show GOOD CAUSE as to why the rehearing should be held. Good cause means any of the following: • Error in law. • Mistake of fact. • Fraud. • Any reason the Tribunal deems sufficient. • NEW evidence is NOT good cause for a rehearing!! • Not understanding that documentation was needed at the hearing is NOT good cause for a rehearing. • Be clear in your reasons for requesting a rehearing. SC Rehearings continued next slide

27. Small Claims Rehearings continued • The opposing party has 14 days after service of the request to respond to the rehearing request. • If your request is granted, you will be scheduled for a hearing before a Tribunal Member at a date, time and place established by the Tribunal. Generally, these hearings are about 45 minutes to one hour in length. • You may submit additional documentation AFTER the rehearing request has been granted. The Tribunal file has all the previously submitted documentation and it does not need to be re-submitted.

28. Stipulations ( a settlement agreement) • A stipulation is an agreement between parties resolving a case or addressing specific facts, filed for the Tribunal’s approval. • All parties or their authorized representatives must sign and date the stipulation. • The ORIGINAL stipulation with ORIGINAL signatures must be filed with the Tribunal. You must submit the ENTIRE AGREEMENT. Stipulations continued next slide

29. Stipulations continued • No faxed stipulations will be processed! • If there are ANY side agreements, they MUST be included with the stipulation. • A stipulation is treated as a motion and requires a motion fee of $25.00 unless the property has a principal residence exemption of at least 50% for the tax years at issue. If the appeal concerns a principal residence exemption DENIAL, a fee is required. Stipulations continued next slide

30. Stipulations continued • If any item on the stipulation is not complete or needs further explanation, the stipulation may be defected or denied. • Written notification is required from the petitioner to inform the Tribunal that a stipulation is forthcoming. A phone call is insufficient, but the written notification may be faxed. • Tribunal staff need to inform the Administrative Law Judge that the case has been settled if the parties notify the Tribunal less than 10 days prior to the scheduled hearing.

31. Miscellaneous Information The following few screens have information that may be useful to you as you are going through the appeal process.

32. REMEMBER!!! • Taxable Value is a mathematical calculation, therefore, it CANNOT be stipulated to unless there are additions or losses involving the property!! An example of an addition would be a garage that has been built on property that never had a garage before, while a loss would be a garage that burned downed. You must provide justification for taxable value changes if you are going outside the statutory calculation.

33. REMEMBER CAPPED VALUE FORMULA (Taxable Value) (PRIOR TAXABLE VALUE MINUS ½ TRUE CASH VALUE OF LOSSES) MULTIPLIED BY THE LESSER OF 1.05 or ANNUAL INFLATION RATE + ½ TRUE CASH VALUE OF ADDITIONS

34. TAXABLE VALUE IS THE LESSER OF STATE EQUALIZED VALUE CAPPED TAXABLE VALUE

35. Did you know …? MCL 211.27a (3) Ownership Changes: Transfers of ownership require the assessor to “uncap” the taxable value. The assessor has no choice but to uncap the taxable value. AFTER THE MARCH BOARD OF REVIEW AN ASSESSOR is required to file an “Assessor Affidavit” (STC Form L-4054) when a transfer of ownership is discovered and the taxable value has not been uncapped.

36. REMEMBER!!! The July and December Boards of Review ONLY meet to correct clerical errors and/or mutual mistakes, hear appeals regarding principal residence and poverty exemptions and agricultural exemptions.

37. ECF (Economic Condition Factor) The ECF adjusts the cost approach to reflect a 50% assessment ratio for a neighborhood. • Calculated for neighborhoods that have similar market influences. • Only used in mass appraisal. • Adjusts the entire neighborhood by the same percentage. • Adjusts the assessment ratio to 50% based upon sales in the neighborhood. • Use of ECF does not mean that individual properties are assessed at 50% of market value. • Does NOT apply to land.

38. Deadlines for Appeal Tribunal jurisdiction is based on the law. Jurisdiction is invoked by the timely and proper filing of an appeal letter. If the Tribunal does not have jurisdiction, it has no authority to hear the appeal. The Tribunal reviews each appeal to see if the Tribunal has jurisdiction. The following slides are a quick reference on the appeal deadlines:

39. Deadlines for Appeal Valuation Appeals to the Tax Tribunal: • AFTER March BOR and on or before June 30 of the tax year involved. MCL. 205.735(2); TTR 205 • 30 days AFTER notice of assessment change is issued, if the notice was not properly sent prior to the March Board of Review for the tax year at issue. MCL 205.735(2) • 30 days AFTER State Tax Commission order is issued. MCL 205.735(2) • 30 days AFTER notice of July or December BOR decision revising property’s assessed and/or taxable value is issued. MCL 205.735(2) • 53a Jurisdiction is determined on a case by case basis. Such appeals should include information about the specific error or mistake. MCL 211.53a • 35 days AFTER notice of uncapping taxable value is received. MCL.211.27(b) Contested Tax Bills: • Must be filed within 60 days AFTER mailing of the contested tax bill. MCL 205.735

40. Important Due Dates It’s important to know various “due dates” that are involved in the appeal process. Knowing these due dates can prevent unnecessary problems, delays, and difficulties. Here are some of the due dates that commonly give parties difficulty:

41. Important Due Dates Requests for Rehearings (SC): • Must be filed with the Tribunal within 20 days after entry of the order. Proof of service and filing fee ($25.00) are necessary unless property has a principal residence exemption of 50% or more. MCL 205.762 Small Claims (SC) Appeal Petition Form: • The completed and signed petition form must be filed by the due date on the form or the appeal will be dismissed (28 days). TTR 320(2) SC Appeal Answer Form: • The completed and signed answer form must be completed by Respondent and returned to the Tribunal by the due date at the bottom of the form (28 days). TTR 332 SC Evidence: • May not be admitted if LESS than 14 days prior to a scheduled Small Claims hearing. TTR 342(2)

42. Information Resourceshttp://www.michigan.gov/taxtribunal On the Tribunal Web site: • The Rules of Practice and Procedure • The Tax Tribunal Act • FAQs • Sample and Fillable Forms • Filing Fee Information • Docket Card Search by Name and Docket Number • Related Links

43. Michigan Tax Tribunal For more information, please contact the Tribunal’s internet address athttp://www.michigan.gov/taxtribunalOR contact the Tribunal at: Michigan Tax Tribunal PO Box 30232 Lansing, MI 48909-7732 PH: 517/334-6521 FX: 517/334-6535

44. This is the end of Small Claims Property Appeal Process Presentation