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Michigan Supreme Court Lansing, Michigan

Opinion
MICHIGAN PROPERTIES, L.L.C., Petitioner-Appellee, v

Chief Justice:

Justices:

Robert P. Young, Jr. Michael F. Cavanagh Marilyn Kelly Stephen J. Markman Diane M. Hathaway Mary Beth Kelly Brian K. Zahra FILED JUNE 14, 2012

STATE OF MICHIGAN SUPREME COURT

Nos. 143085, 143086, and 143087

MERIDIAN TOWNSHIP, Respondent-Appellant.

TOLL NORTHVILLE LIMITED PARTNERSHIP and BILTMORE WINEMAN LLC, Petitioners-Appellants, v NORTHVILLE TOWNSHIP, Respondent-Appellee. No. 143281

BEFORE THE ENTIRE BENCH HATHAWAY, J.

The cases before us involve the proper interpretation of the General Property Tax Act (GPTA), MCL 211.1 et seq. In Michigan Properties, LLC v Meridian Township, we address whether a tax assessor's failure to adjust the taxable value of a parcel of real property in the year immediately following its transfer 1 precludes a March board of review from adjusting the taxable value in a later year. We hold 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 does 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, we also hold 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, we reverse the judgment of the Court of Appeals and reinstate 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. Next, in Toll Northville Limited Partnership v Northville Township, we address 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. 2 We hold that the Tax Tribunal does have the authority to reduce an
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See MCL 211.27a(3).

This appeal marks the second time that Toll Northville Limited Partnership and Northville Township have come before us with this dispute. In Toll Northville Ltd v

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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 3 sets forth the Tax Tribunal's jurisdiction. 4 Once its jurisdiction is 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, we reverse the Court of Appeals' judgment and remand to that Court to consider Northville Township's remaining issues on appeal regarding the Tax Tribunal's valuation of the properties. 5 I. MICHIGAN PROPERTIES, LLC v MERIDIAN TOWNSHIP A. FACTS AND PROCEDURAL HISTORY Michigan Properties, L.L.C., purchased three apartment complexes located in Meridian Township in December 2004. Michigan Properties timely filed a required affidavit in January 2005, notifying Meridian's assessor of the transfers of ownership.

Northville Twp, 480 Mich 6, 13-14; 743 NW2d 902 (2008), we unanimously declared that the statutory provision allowing the value of the properties at issue to increase because of public-service improvements was unconstitutional.
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MCL 205.701 et seq. MCL 205.731.

We will discuss each case separately. We begin with Mich Props because the issue in Toll Northville is predicated on whether a March board of review has the power to correct a previous erroneous taxable value.

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Meridian's assessor failed to comply with MCL 211.27a(3) 6 by not adjusting, or "uncapping," 7 the taxable values of the properties for tax year 2005 to reflect their posttransfer taxable values. As a result of this failure, the taxable values for tax year 2005 were entered into the tax rolls using pretransfer values that were not in compliance with MCL 211.27a(3). In October 2006, Meridian sent a letter notifying Michigan Properties of the erroneous values. The letter informed Michigan Properties that it would receive a revised tax bill for tax year 2005 reflecting new taxable values because of the 2004 transfer and that the taxable values for tax year 2006 would be revised accordingly by Meridian's December board of review. 8 Litigation ensued, and the parties ultimately entered into a consent judgment for each property in February 2007 pertaining to tax years 2005 and 2006. The consent judgments stipulated that Meridian reserved the right to petition the March board of review for tax year 2007, or for any year thereafter, to uncap the properties' taxable values because of the transfers in December 2004. Meridian
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MCL 211.27a(3) provides: "Upon a transfer of ownership of property after 1994, the property's taxable value for the calendar year following the year of the transfer is the property's state equalized valuation for the calendar year following the transfer." After ownership of a property has been transferred, the taxable value of the property is "uncapped" and is subject to reassessment based on the property's actual value. Klooster v City of Charlevoix, 488 Mich 289, 297; 795 NW2d 578 (2011).

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The December board of review, however, took no action. Michigan Properties appealed Meridian's decision for tax years 2005 and 2006 in the Tax Tribunal. Michigan Properties argued that the time frame for challenging the 2005 taxable values, and any subsequent values based on the 2005 assessment, had expired because Meridian had not timely challenged the 2005 assessments when the 2005 values were first placed on the tax rolls.

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subsequently exercised its right to petition the March board of review to adjust the 2007 taxable values. The March board of review granted Meridian's requested relief,

uncapping the taxable values for tax year 2007 on the basis of the December 2004 transfers of ownership. 9 Michigan Properties filed the instant appeals of those decisions in the Tax Tribunal, arguing that the time frame for challenging the 2005 taxable values, and any subsequent values based on the 2005 assessments, had expired because Meridian had not timely challenged the 2005 assessments. Meridian moved for summary disposition, arguing that the March board of review had acted within its authority to bring taxable values into compliance with the GPTA pursuant to MCL 211.29 and MCL 211.30. The tribunal granted Meridian's motion for summary disposition. Michigan Properties appealed the Tax Tribunal's decision in the Court of Appeals. In a published decision, the Court of Appeals reversed the Tax Tribunal and held that the March board of review could not uncap the taxable values relating to the December 2004 transfers. 10 Meridian sought leave to appeal in this Court. We granted leave to appeal, directing the parties to discuss "whether the failure of the taxing authority's assessor to adjust the taxable value of real property in the year immediately after a transfer of the property in accordance with MCL 211.27a(3) precludes the board of review from

Thus, 2007 is the only tax year before us in Mich Props. For tax year 2007, the total pretransfer taxable value for the three properties combined was assessed at $10,376,535. By including the uncapping based on the 2004 transfers, the March board of review adjusted the assessments for 2007 to a total taxable value of $14,905,107.
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Mich Props, LLC v Meridian Twp, 292 Mich App 147; 808 NW2d 506 (2011).

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adjusting the taxable value in a later year." Mich Props, LLC v Meridian Twp, 490 Mich 877 (2011). B. STANDARD OF REVIEW Review of decisions by the Tax Tribunal is limited. Mt Pleasant v State Tax Comm, 477 Mich 50, 53; 729 NW2d 833 (2007). "In the absence of fraud, error of law or the adoption of wrong principles, no appeal may be taken to any court from any final agency provided for the administration of property tax laws from any decision relating to valuation or allocation." Const 1963, art 6,

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