Property Tax Resources

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Michigan Property Tax Updates


New Michigan Industrial Tax Abatement Decision

Michigan’s Public Act 198 of 1974 (“PA 198”) provides a discretionary property tax abatement program for industrial facilities.   The program can be used for new construction or rehabilitation projects. Generally, under the program, new construction receives an approximately 50% reduction in the tax rate, and a rehabilitated property’s tax base is frozen at the pre-rehabilitated value. PA 198 abatements must be approved by both the local unit of government and the State Tax Commission (STC) and may have a term up to 12 years after the completion of construction.

In Delta Business Center, LLC v Delta Charter Township, a June 20, 2019 published decision of the Michigan Court of Appeals (Docket No. 343386), the Court clarified that if a property is leased, in order to be eligible to receive the abatement, the lessee of the property must be liable for the taxes and must furnish proof of that liability.

In this case, the owner-landlord applied for the abatement.   The Township approved the abatement, but the STC denied it stating that even though the property’s lessees would be using the property for industrial purposes, the applicant owner did not engage in any eligible industrial activities.   The Court of Appeals found that, contrary to the STC’s finding, the statute does not require an applicant to be engaged in an eligible industrial activity, however, it affirmed the denial of the abatement because no proof was submitted that the lessees were liable for the taxes.

Mark Hilpert
American Property Tax Counsel (APTC)

Massachusetts Property Tax Updates
Minnesota Property Tax Updates

American Property Tax Counsel

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