MTT Troy - 2 cases re LLC.pdf
Laura McCool Graham Petitioner V Township Of Peninsula, Sally A Murray Respondents · 26-002851-TT
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4 = STATE'OF MICHIGAN MICHIGAN TAX TRIBUNAL ne BANMOOR, LLC V. CITY OF TROY MTT DOCKET NO. 24-001139 PROPOSED & FINALOPINION A JUDGEMENT AND APPELLANT \ RESP BEFORE: ERISSA J. GLEKLER | PATRICIA L. HALM PROPOSED JUDGMENT The Tribunal determined that the subject property's taxable value (TV) was properly uncapped under MCL 211.27a. Taxable Values ordered: YR TV 2024 $236,00 2025 $243310 PROCEDURAL HISTORY Petitioner received notice that the prop- erty’s TV was uncapped for the 2024 tax year Petitioner protested the uncapping to the March 2024 Board of Review, which upheld the uncapping. Petitioner filed a Petition with the Tribu- nal on May 11, 2024. Respondent filed an Answer on June 13, 2024. The disputed taxable values fall with- in the jurisdictional limits of the Small Claims Division, and subsequent tax years were properly included. ISSUES AND APPLICABLE LAW ISSUE Whether Petitioner proved, by a preponderance of the evidence, that the subject property's tax- able value was improperly uncapped under MCL 21.27a. APPLICABLE LAW Taxable value is capped unless a transfer of ownership occurs. Oo THE MICHIGAN ASSESSOR | voL 67, NO. 1 A transfer of ownership includes the con- veyance of title or beneficial use, including a conveyance by deed. Transfers between commonly controlled legal entities may be excluded from uncap- ping, but only when both parties qualify as “legal entities” under the statute. CONTENTION OF VALUE PETITIONER'S EVIDENCE YR TV 2024 $186,953 2025 Petitioner asserted that the taxable value should not have uncapped because: The property was conveyed in 2023 from husband and wife (tenants by the entirety) to an LLC solely owned by the same individuals Petitioner asserted there was no change in beneficial use or control. The conveyance was exempt from real estate transfer tax, and Petitioner argued it should also be exempt from uncapping. Petitioner claimed the transfer fell under the commonly controlled entities exception. A Property Transfer Affidavit was asserted to have been timely filed. RESPONDENT'S EVIDENCE YR TV 2024 $236,000 2025 $243310 JANUARY / FEBRUARY 2026
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980 BANMOOR, LLC V. CITY OF TROY Respondent contended that the taxable value was properly uncapped because: This conveyance constituted a transfer of ownership by deed, requiring uncapping The exemption from real estate transfer tax does not exempt a property from uncapping. Beneficial use changed because ownership moved from individuals to an LLC, which is a separate legal entity. Natural persons do not qualify as a “legal entity” for purposes of the common- control exemption. FINDINGS OF FACT The Tribunal found the following facts proven by a preponderance of the evidence: 1. The property is located at 980 Banmoor Drive, Oakland County. 2. The property is classified as residential. 3. The property was purchased by husband and wife in 2012. 4. The property was conveyed to 980 Ban- moor LLC on October 23, 2023. 5. The LLC's sole members are the same husband and wife, as tenants by the en- tirety. CONCLUSIONS OF LAW The Tribunal concluded that: A transfer of ownership occurred under MCL 211.27a(6)(a) due to the conveyance by deed Membership in an LLC does not confer ownership or beneficial use of the LLC's real property. Natural persons are not “legal entities” un- der MCL 211.27a(7)(m). The commonly controlled entities exception did not apply. Any exemption from transfer tax was legally irrelevant to taxable value uncapping. The Tribunal found a change in beneficial use as a matter of law. The 2024 taxable value was therefore prop- erly uncapped. JANUARY / FEBRUARY 2026 FINAL OPINION AND JUDGMENT More than 20 days passed without either party filing exceptionsagainst the POJ. The Tribunal determined that the Administrative Law Judge properly reviewed all testimony and timely submitted evidence. The POJ was found to be supported by the record and by applicable statutory and case law. As a result, the Tribunal adopted the PO) as its Final Opinion and Judgment. TOO LONG ; DIDN'T READ A residential property was trans- ferred in 2023 from a married couple to their wholly owned LLC. The City of Troy uncapped the property's taxable value for 2024. The owner argued that because ownership and control remained the same, uncap- ping was improper and sought a lower taxable value. The Michigan Tax Tribunal ruled that the deed transfer constituted a transfer of ownership under state law, that beneficial use changed as a matter of law, and that the common-control exemption did not apply because natural persons are not legal entities. The Tribunal upheld the City’s uncapped taxable values of $236,000 for 2024 and $243,310 for 2025. PATRICIA L. HALM TRIBUNAL JUDGE ERISSA GLEKLER ADMINISTRATIVE LAW JUDGE voL 67, No.1 | THE MICHIGAN ASSESSOR (5 ]
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STATE OF MICHIGA hE # MICHIGAN TAX pr Efe) 3146 LOUIS, LLC V. CIFY'OF TROY PETITIONER-APPELLANT MTT DOCKET NO. 24-001140 PROPOSED & JUDGEMEN NT BEFORE: ERISSA J. GLEKLER | PATRICIA L. HALM The Tribunal determined that the subject property's taxable value (TV) was properly uncapped under MCL 211.27a. Taxable Values ordered: YR TV 2024 $172,900 2025 $178,250 Petitioner received notice that the subject property's taxable value was uncapped for the 2024 tax year through the 2024 assessment notice. Petitioner protested the uncapping to the March 2024 Board of Review. Petitioner filed a petition with the Tribunal on May 11, 2024, and Respondent filed an answer on June 13, 2024. The taxable value amounts in dispute for all tax years at issue were within the jurisdiction of the Small Claims Division, and the proper- ty's assessment for subsequent tax years was included in the proceeding. The issue before the Tribunal was whether Petitioner proved by a preponderance of the evidence that the subject property's taxable value was improperly uncapped under MCL 211.27A Under the General Property Tax Act, taxable value is the lesser of assessed value or capped value unless a transfer of ownership occurs. A transfer of ownership includes a conveyance by deed and includes changes in beneficial use. FINALOPINION AND RESPONDENT-APPELLEE Transfers between entities under common control are excluded from uncapping only if the transfer is between legal entities as de- fined by statute. YR TV 2024 $99,425 2025 = Petitioner argued that the October 23, 2023 conveyance from Sreenivasulu Bajji and Swarnalatha Subramanian Setti to 3146 Louis LLC did not constitute a transfer of ownership for uncapping purposes. Petitioner asserted that: The grantors and the LLC were under common control There was no change in beneficial use The conveyance was exempt from real estate transfer tax A property transfer affidavit was timely filed Prior Tribunal precedent supported treating the transaction as non-uncapping Petitioner maintained that ownership remained substantively unchanged because the same individuals controlled the property before and after conveyance. YR TV 2024 $172,900 2025 $178,250 Respondent contended that the taxable value
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3146 LOUIS, LLC V.CITY OF TROY was properly uncapped because: A warranty deed was recorded on December 18, 2023 * The conveyance met the statutory definition of a transfer of ownership The transfer was from natural persons to a legal entity * The change resulted in a change in beneficial use * The “common control” exemption did not apply because the grantors were not a legal entity Transfer tax exemptions do not affect uncapping determinations Respondent relied on statutory language and Court of Appeals decisions supporting uncapping upon conveyance by deed. FINDINGS OF FACT The Tribunal found the following facts proven by a preponderance of the evidence: 1. The subject property is located at 3146 Louis Drive, Oakland County 2. The property is classified as residential. 3. The property was purchased by Sreeniva- sulu Bajji and Swarnalatha Subramanian Setti on September 27, 2006. 4. The property was conveyed to 3146 Louis LLC on October 23, 2023. 5. The sole members of the LLC are Sreeni- vasulu Bajji and Swarnalatha Subramani- an Setti. CONCLUSIONS OF LAW The Tribunal concluded that: A conveyance by deed constitutes a transfer of ownership under MCL 211.27a(6). Membership in an LLC does not confer ownership or beneficial use of the real property held by the LLC. Natural persons are not legal entities for purposes of the common-control exemp- tion. A tenancy by the entirety does not create JANUARY / FEBRUARY 2026 a partnership or legal entity. The conveyance from individuals to an LLC resulted in a change in beneficial use. The statutory exclusion for transfers among commonly controlled legal enti- ties did not apply. Accordingly, the Tribunal concluded that the 2023 conveyance triggered uncapping, and the 2024 taxable value was properly uncapped. FINAL OPINION AND JUDGMENT More than 20 days passed without either party filing exceptionsagainst the POJ. The Tribunal determined that the Administrative Law Judge properly reviewed all testimony and timely submitted evidence. The POJ was found to be supported by the record and by applicable statutory and case law. As a result, the Tribunal adopted the PO) as its Final Opinion and Judgment. TOO LONG ; DIDN'T READ PATRICIA L. HALM TRIBUNAL JUDGE ERISSA GLEKLER ADMINISTRATIVE LAW JUDGE voL 67, No.1 | THE MICHIGAN ASSESSOR (2 ]