Rebuttal P10 - 2005_Qualified_Agricultural_Prop (1).pdf

J & S Farms LLC, Petitioner V Township Of Holland, Respondent · 25-003108-TT

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REBUTTAL 

P-10

STATE TAX COMMISSION 

 

QUALIFIED AGRICULTURAL PROPERTY 

 

EXEMPTION GUIDELINES 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued by the State Tax Commission August 2018

MTT Docket No. 25-003108 

October 21, 2026 

Rebuttal P10-001

Table of Contents 

 

What is the Qualified Agricultural Exemption? ............................................ 2 

How does Property Qualify for the Exemption? .......................................... 2 

Definition of Agricultural Use: .................................................................. 3 

Ownership ............................................................................................... 5 

Related Buildings .................................................................................... 6 

Partial Exemptions .................................................................................. 7 

Other Eligibility Considerations: ............................................................... 9 

Denials and Appeals ................................................................................. 10 

Classification Appeals ........................................................................... 12 

Withdrawals and Rescissions ................................................................... 13 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

MTT Docket No. 25-003108 

October 21, 2026 

Rebuttal P10-002

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What is the Qualified Agricultural Exemption? 

 

MCL 211.7ee provides for an exemption from certain local school operating taxes, typically 

up to 18 mills, for parcels that meet the qualified agricultural property definition. 

 

(1) Qualified agricultural property is exempt from the tax levied by a local school 

district for school operating purposes to the extent provided under section 1211 of the 

revised school code, 1976 PA 451, MCL 380.1211, according to the provisions of this 

section. 

 

Qualified Agricultural Property is further defined in MCL 211.7dd as: 

 

(d) "Qualified agricultural property" means unoccupied property and related buildings 

classified as agricultural, or other unoccupied property and related buildings located on 

that property devoted primarily to agricultural use as defined in section 36101 of the 

natural resources and environmental protection act, 1994 PA 451, MCL 324.36101. 

 

A parcel is qualified agricultural property through one of two ways: 

 

1. Classification of the parcel as agricultural on the current assessment roll or 

 

2. Devotion of more than 50% of the acreage of the parcel to agricultural use (described 

below) as defined by MCL 324.36101. 

 

In addition to the up to 18 mill exemption, a transfer of qualified agricultural property is not 

considered a transfer of ownership if both of the following are true: 

 

1. The property remains qualified agricultural property after the transfer AND 

 

2. The new owner files Form 3676 with the assessor and the register of deeds. This form, 

available in the appendix, is an affidavit attesting that qualified agricultural property 

shall remain qualified agricultural property. 

 

How does Property Qualify for the Exemption? 

 

In order to qualify for the exemption, owners of parcels that are not classified agricultural 

must file an affidavit, Form 2599, claiming the exemption with the local assessor by May 1. 

 

An assessor will use the status of the land on May 1st in making their determination for 

qualification. In situations where the land may not be actively farmed on May 1, the parcel 

may still be eligible for the exemption. For example, the land may be intentionally left fallow 

or the growing season for a crop in some parts of the State may begin after May 1, etc. 

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October 21, 2026 

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Owners of property classified agricultural are not normally required to file the affidavit to 

obtain the exemption, however an assessor may request that this form be filed to determine if 

the parcel contains structures that are not exempt as qualified agricultural property. 

 

The percentage of a parcel that is devoted to agricultural use is calculated based on the 

portion of the parcel’s total acreage, including any area(s) covered by an easement or right-

of-way for road or drain purposes, that is devoted to agricultural use, not the portion of the 

parcel’s tillable acreage that is devoted to agricultural use. 

 

Example: A 15-acre parcel is classified residential. Of the parcel’s 15 acres, 4 acres are 

tillable and are devoted to an agricultural use. The remaining 11 acres are not devoted to an 

agricultural use. The parcel is not eligible for the qualified agricultural property exemption 

since the parcel is not classified agricultural and only 26.7 percent of the parcel is devoted to 

a defined agricultural use, even though 100.0 percent of the tillable acreage of the parcel is 

devoted to a defined agricultural use. 

 

Definition of Agricultural Use: 

 

The definition of “agricultural use” is contained in MCL 324.36101: 

 

“Agricultural use” means the production of plants and animals useful to humans, 

including forages and sod crops; grains, feed crops, and field crops; dairy and 

dairy products; poultry and poultry products; livestock, including breeding and 

grazing of cattle, swine, captive cervidae, and similar animals; berries; herbs; 

flowers; seeds; grasses; nursery stock; fruits; vegetables; Christmas trees; and 

other similar uses and activities. Agricultural use includes use in a federal 

acreage set-aside program or a federal conservation reserve program. 

Agricultural use does not include the management and harvesting of a woodlot. 

 

Note: The definition of “agricultural use” is not to be used in determining a parcel’s 

classification. Similarly, the definition for classification contained in MCL 211.34c is not to be 

used in determining whether a parcel is devoted primarily to agricultural use for the qualified 

agricultural exemption. 

 

Let’s review some of the specific provisions of the definition of agricultural use: 

 

• In the definition of “agricultural use” what is meant by “captive cervidae”? Captive 

Cervidae are a group of animals including deer, reindeer, moose, and elk that are held 

in captivity. The breeding and grazing of captive cervidae includes farms where 

cervidae are held and raised for the same or similar purposes as are customary in the 

breeding and grazing of other animals such as cattle. 

 

 

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October 21, 2026 

Rebuttal P10-004

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• What are the specifics of the statute related to raising horses, training horses and 

boarding horses? Property devoted to the production of animals useful to humans 

meets this definition of “agricultural use”. This can include boarding horses, raising 

horses for sale and training horses. 

 

Raising horses for sale can take many forms, including horses that are raised and 

trained for sale as race horses or horses that are raised and sold to others for their 

personal use (for riding, etc.). For example: A 60-acre parcel is classified residential. 

This parcel is improved with a stable, corrals for horses, and a banked dirt race track 

with no other improvements on the parcel. All 60 acres of the parcel are used to raise 

the parcel owner’s horses and train them to be race horses. This property would qualify 

for the exemption under the part of the definition related to the production of animals 

useful to humans. 

 

• How is timber harvest treated compared to harvesting Christmas trees or ornamental 

trees used in landscaping? Growing and harvesting Christmas trees is specifically 

defined in the law as an agricultural use. The same can be said for property devoted 

to the production of ornamental trees and other nursery and bedding plants (including 

the greenhouses used to grow these plants). However, property, including 

greenhouses, used primarily to sell or market plants is not entitled to the qualified 

agricultural property exemption because the retail sale of plants is a commercial 

activity. 

 

Regarding timber harvest, the definition of agricultural use specifically indicates: 

“…Agricultural use does not include the management and harvesting of a Woodlot.” 

 

• How are maple syrup operations treated? The agricultural use definition under MCL 

324.36101 now includes the harvesting of sap for maple syrup production. However, 

the processing of sap into maple syrup is not an agricultural operation. 

 

• Agricultural use includes use in a federal acreage set-aside program or a federal 

conservation reserve program, what types of programs are included and what does 

this mean? Generally speaking, these programs pay property owners not to farm 

(although some such programs do allow continued farming of the enrolled property). 

 

Under these programs, the owners may also be required to plant ground covers, thin 

trees, enhance wetlands, develop wildlife habitat, etc. If property is enrolled in a 

federal acreage set-aside program or a CRP, the owner will have a contract for a 

specific number of acres. Assessor’s should ask for a copy of the contract to 

determine how many acres are enrolled in these programs and if the contract is still 

active. 

 

 

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October 21, 2026 

Rebuttal P10-005

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Land covered by a Farmland Development Rights Agreement (PA 116 Land) are not 

automatically eligible for the exemption. Under these agreements, a temporary 

restriction on the land is established between the State and a landowner (voluntarily 

entered into by the landowner). The objective of the restriction is to preserve the land 

for agriculture, in exchange for certain (income) tax benefits and exemption from 

various special assessments. 

 

Often the parcels covered by these agreements are considered to be devoted to an 

agricultural use. However, the fact that land is enrolled in a PA 116 agreement is not 

the determining factor whether the land is devoted to an agricultural use. Rather, it is 

the actual use of the property that is relevant in making this determination. If 

property is covered by a Farmland Development Rights Agreement, but no agricultural 

use exists, then the property would not be eligible for the exemption. 

 

Ownership 

 

MCL 211.7dd(a) defines “owner” for the purposes of the qualified agricultural exemption as 

any of the following: 

 

 (i) A person who owns property or who is purchasing property under a land contract. 

(ii) A person who is a partial owner of property. 

(iii) A person who owns property as a result of being a beneficiary of a will or trust or 

as a result of intestate succession. 

(iv) A person who owns or is purchasing a dwelling on leased land. 

(v) A person holding a life lease in property previously sold or transferred to another. 

(vi) A grantor who has placed the property in a revocable trust or a qualified personal 

residence trust. 

(vii) The sole present beneficiary of a trust if the trust purchased or acquired the 

property as a principal residence for the sole present beneficiary of the trust, and the 

sole present beneficiary of the trust is totally and permanently disabled. As used in this 

subparagraph, "totally and permanently disabled" means disability as defined in 

section 216 of title II of the social security act, 42 USC 416, without regard as to 

whether the sole present beneficiary of the trust has reached the age of retirement. 

(viii) A cooperative housing corporation. 

(ix) A facility as defined by former 1976 PA 440 and registered under the continuing 

care community disclosure act, 2014 PA 448, MCL 554.901 to 554.993. 

 

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October 21, 2026 

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Related Buildings 

 

MCL 211.7dd(d) defines qualified agricultural property as: 

 

"Qualified agricultural property" means unoccupied property and related 

buildings classified as agricultural, or other unoccupied property and related 

buildings located on that property devoted primarily to agricultural use as 

defined in section 36101 of the natural resources and environmental protection 

act, 1994 PA 451, MCL 324.36101. Related buildings include a residence 

occupied by a person employed in or actively involved in the agricultural 

use and who has not claimed a principal residence exemption on other 

property. 

 

Related buildings are structures on a parcel that are, in some way, part of the agricultural 

operation or use on that parcel. Examples of related buildings can include barns, sheds, 

poultry houses, etc. Additionally, related buildings are defined in the law to include a 

residence occupied by a person employed in or actively involved in the parcel’s agricultural 

use and who has not claimed the homeowner’s principal residence exemption on other 

property. 

 

MCL 211.7dd(d) further states: 

 

Property used for commercial storage, commercial processing, commercial 

distribution, commercial marketing, or commercial shipping operations or other 

commercial or industrial purposes is not qualified agricultural property. 

 

Therefore, buildings of any type (or land) used for commercial or industrial purposes are not 

qualified agricultural property and are not entitled to the qualified agricultural property 

exemption. This is true even if the parcel containing the buildings is classified agricultural on 

the assessment roll and even if more than half the parcel’s acreage is devoted to an 

agricultural use as defined by law. Commercial purposes include, but are not limited to, 

commercial storage, commercial processing, commercial distribution, commercial marketing, 

and commercial shipping operations. 

 

Some specific examples: 

 

1. An unoccupied house is located on a 160-acre parcel classified agricultural on the 

assessment roll. Of the 160 acres, 158 are farmed. The house is on the other 2 

acres. 

 

The parcel is entitled to the qualified agricultural property exemption because it is classified 

agricultural by the assessor on the assessment roll. However, for a residence to be a related 

building and be entitled to the qualified agricultural property exemption, the residence must 

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October 21, 2026 

Rebuttal P10-007

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be occupied by someone employed in or actively involved in the farming operation who has 

not claimed a homeowner’s principal residence exemption on other property. Because this 

house is not occupied, it is not a related building and not entitled to the qualified agricultural 

property exemption. In this case, the parcel would be entitled to a partial exemption. 

 

Other examples where buildings would not qualify include: a house rented to someone who is 

not employed in or not actively involved in the farming operation; or a house occupied by 

someone (including the owner) employed in or actively involved in the farming use but who 

has claimed a homeowner’s principal residence exemption on other property. 

 

2. A house is located on a 1/2 acre parcel, not classified agricultural with no agricultural 

use. The owner of the parcel owns and operates a 40 acre farming operation adjacent 

to the 1/2 acre parcel. The house is occupied by the owner of the farm and they have 

not claimed a principal residence exemption on the home. Is the 1/2-acre parcel 

eligible for the qualified agricultural property exemption? 

 

No. The qualified agricultural property exemption is decided on a parcel-by-parcel basis. To 

be eligible for the qualified agricultural property exemption, a structure must be a related 

building and must be located on a parcel that is classified agricultural or that is devoted 

primarily to agricultural use. However, the ½ acre parcel may qualify for the principal 

residence exemption. 

 

3. Is a barn located on a parcel that is classified agricultural on the assessment roll (or 

located on a parcel that is devoted primarily to agricultural use) entitled to the qualified 

agricultural property exemption if the barn is not devoted at all to an agricultural use? 

 

No. For a barn or other related building to be entitled to the qualified agricultural property 

exemption, that related building must itself be devoted primarily to an agricultural use. 

 

Partial Exemptions 

 

Partial exemptions are provided in situations where the property is classified agricultural and 

there is a commercial building or unrelated building on the property or in situations where the 

property is devoted primarily to agricultural use but has a commercial building or unrelated 

building. 

 

If a parcel has a commercial marketing operation or a barn used for commercial storage on it, 

but otherwise qualifies for the exemption, the parcel would receive a partial qualified 

agricultural property exemption. The portion of the parcel’s total state equalized valuation 

(SEV) related to the property that is used for the commercial marketing operation or the barn 

used for commercial storage is not entitled to the qualified agricultural property exemption. 

 

 

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October 21, 2026 

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In these situations, the partial exemption percentage is determined based on the SEV of the 

portion of the parcel entitled to the exemption in relation to the SEV of the entire parcel. The 

percentage of the exemption is not based on the size (i.e., area) of the portion of the parcel 

entitled to the exemption; it is based on value. 

 

Example: 38 acres of a 40-acre parcel classified agricultural by the assessor is farmed. The 

only improvement to the parcel is a structure on the remaining 2 acres that is used seasonally 

to sell produce. The total SEV for the parcel is $42,000, with the structure and 2 acres having 

an SEV of $8,000. The parcel is entitled to a qualified agricultural property exemption 

because it is classified agricultural, however it is entitled only to a partial exemption because 

a portion of the parcel is devoted to a commercial marketing operation. The partial qualified 

agricultural property exemption is 81%: $8,000 SEV of the commercial marketing operation 

property ÷ $42,000 total SEV of the parcel = 19% subtracted from 100%. 

 

This same calculation method would be used for a parcel that has a residence on it that is not 

a related building. 

 

The State Tax Commission (STC) has determined that property receiving the homeowner’s 

principal residence exemption cannot also be qualified agricultural property. It is the opinion 

of the STC that the homeowner’s principal residence exemption takes priority over the 

qualified agricultural property exemption. 

 

Although property that has been granted a principal residence exemption cannot also receive 

the qualified agricultural property exemption, it is possible, but very unusual, for the property 

to receive a partial principal residence exemption and a partial qualified agricultural property 

exemption. The portion of the parcel which otherwise qualifies for the qualified agricultural 

property exemption and is not receiving the principal residence exemption can receive the 

qualified agricultural property exemption. 

 

Example: A 40-acre parcel is classified residential. The parcel is improved with a house that 

is occupied by the owner. 30 acres of the parcel are unimproved and rented by the owner to 

someone who farms the 30 acres. The parcel has been granted a partial homeowner’s 

principal residence exemption because the 30 acres are rented. Under these circumstances, 

the owner can also claim a partial qualified agricultural property exemption for the parcel 

since more than 50 percent of the parcel’s acreage is devoted to an agricultural use. The 

portion of the property receiving the homeowner’s principal residence exemption (the house 

and the front 10 acres) is not entitled to the qualified agricultural property exemption. The 

partial qualified agricultural property exemption would be determined based on the value of 

the property entitled to the exemption (the rear 30 acres) compared to the value of the entire 

parcel. 

 

 

 

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October 21, 2026 

Rebuttal P10-009

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The presence of a cell tower site (or an oil or gas well) on a parcel will affect the parcel’s 

eligibility for the qualified agricultural property exemption even if the cell tower (or the oil or 

gas well) only occupies a small portion of the parcel. Any part of property no matter how 

small a portion of a parcel that is devoted to a commercial or industrial use, is not entitled to 

the qualified agricultural property exemption. If a farm parcel with a cell tower site on it (or an 

oil or gas well on it) otherwise qualifies for the qualified agricultural property exemption, the 

parcel would receive a partial qualified agricultural property exemption. The exemption would 

not be applied to the value of the portion of the property (including any access road, etc.) 

devoted to the cell tower (or the oil or gas well). 

 

Other Eligibility Considerations: 

 

The fact that farmland is rented by the owner is generally not a consideration in determining a 

parcel’s eligibility for the qualified agricultural property exemption. Additionally, the fact that 

the house on a parcel is rented to a farmhand is not a consideration in determining the 

parcel’s eligibility for the exemption. Under the law, for a residence to be qualified agricultural 

property, the residence must be occupied by someone who is either employed in or actively 

involved in the agricultural use on the property and who has not claimed a homeowner’s 

principal residence exemption on other property. A house that is rented to a farmhand is 

considered to be a ‘related building’. 

 

The implementation of a wildlife risk mitigation action plan does not affect the qualified 

agricultural property exemption. MCL 211.7dd specifically indicates that a property shall not 

lose its status as qualified agricultural property as a result of an owner or lessee 

implementing a wildlife risk mitigation action plan. 

 

There are no specific parcel size requirements in the definition of “qualified agricultural 

property”. Even very small parcels can be entitled to the qualified agricultural property 

exemption. 

 

There are no minimum income requirements in the definition of “qualified agricultural 

property”. Even relatively unproductive or unprofitable parcels can be entitled to the qualified 

agricultural property exemption. 

 

If a parcel is not classified agricultural and a determination must be made of the percentage 

devoted to agricultural use, the acre-to-animal ratio may be important. The “acre-to-animal 

ratio” is the number of acres it takes to support 1 of that animal. For example, it may typically 

take 3 acres to support 1 dairy cow. The acre-to-animal ratio for dairy cows would then be 3 

to 1. 

 

Given the number and type of animals involved in a farm operation, the number of acres 

legitimately needed to support those animals can be determined using acre-to-animal ratio(s). 

This will allow an accurate determination of the area truly devoted to an agricultural use. The 

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October 21, 2026 

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area of a parcel, if any, that is not needed to support the number of animals on that parcel is 

not devoted to an agricultural use, even if the excess area is fenced as pasture land 

(assuming the excess area is not devoted to another agricultural use as defined by law). 

 

Example: An 80-acre parcel is classified residential and is unimproved, with the exception of 

fencing for pastures and all 80 acres are fenced. Over the last several years, the owner of 

the property has maintained a herd of 5 dairy cows on the property, with no other animals 

and no other agricultural use on the property. If the standard acre-to-animal ratio for dairy 

cattle is 3 acres to every 1 cow, this parcel is not entitled to the qualified agricultural property 

exemption because it is not classified agricultural and more than half the parcel’s acreage is 

not devoted to an agricultural use. In this case, only 15 of the 80 acres are needed to 

support the herd of dairy cattle (3 acres needed to support each dairy cow x 5 dairy cows = 

15 acres needed to support the dairy herd). Since more than 40 acres of the parcel must be 

devoted to an agricultural use to be qualified agricultural property the parcel is not entitled to 

the qualified agricultural property exemption. 

 

There is no rule of thumb standard for the proper acre to animal ratio that can be applied to 

all types of animals. Reasonable acre to animal ratios likely differ depending upon the type of 

animal involved, and perhaps the quality of the land involved. For example, dairy cows may 

have different grazing area requirements than cattle raised for beef. If the number of acres 

needed to support the animals on a parcel is in question, research should be done through 

the USDA or other organizations to establish a reasonable acre-to-animal ratio for the type(s) 

of animal involved and, if necessary, for the type of land involved. 

 

A parcel’s eligibility for the qualified agricultural property exemption is determined solely by 

the characteristics of that parcel. A parcel not devoted primarily to agricultural use, cannot 

receive the qualified agricultural property exemption even if surrounding parcels under the 

same ownership are devoted primarily to agricultural use or are classified agricultural. 

 

Denials and Appeals 

 

MCL 211.7ee(7) indicates: 

 

If the assessor of the local tax collecting unit believes that the property for which 

an exemption has been granted is not qualified agricultural property, the 

assessor may deny or modify an existing exemption by notifying the owner in 

writing at the time required for providing a notice under section 24c. A taxpayer 

may appeal the assessor's determination to the board of review meeting under 

section 30. A decision of the board of review may be appealed to the residential 

and small claims division of the Michigan tax tribunal. 

 

 

 

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October 21, 2026 

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Therefore, an assessor can deny the qualified agricultural property exemption for the current 

year only (an assessor may not deny a prior year exemption) in three specific situations: 

 

1. The assessor can deny a claim for a new qualified agricultural property exemption. 

When a property owner files Form 2599 and initially claims a new qualified agricultural 

property exemption, the assessor must determine whether the parcel is entitled to the 

qualified agricultural property exemption. If it is not eligible, the assessor can deny (or 

partially deny) the exemption. 

 

2. The assessor can deny (or partially deny) an existing qualified agricultural property 

exemption when preparing the annual assessment roll, if they believe that a parcel that 

received the exemption last year is no longer qualified agricultural property. 

 

3. In the opinion of the State Tax Commission, an assessor can deny (or partially deny) 

an existing qualified agricultural property exemption after the close of the March 

Board of Review, since the status day for this exemption is May 1. For example: last 

year an unimproved 30-acre parcel planted in soybeans and classified residential, 

received a qualified agricultural property exemption. At the time the assessment roll 

was prepared this year, no physical change had occurred on the parcel. Shortly after 

the close of the March Board of Review, the property owner divides the entire parcel 

for residential development, site work begins, utilities are extended to the various 

planned lots, and survey work has begun to put in a private road. It is clear that this 

parcel is no longer qualified agricultural property and will not be qualified agricultural 

property on May 1, status day for this exemption. The assessor in this situation should 

deny the qualified agricultural property exemption for this parcel for the current year. 

 

If an assessor discovers after May 1, a situation where it is clear that a parcel is incorrectly 

receiving the qualified agricultural property exemption, they have no authority to deny the 

exemption for the current year; they may only deny the exemption for the next year. 

 

MCL 211.7ee(6) indicates: 

 

An owner of property that is qualified agricultural property on May 1 for which 

an exemption was not on the tax roll may file an appeal with the July or 

December Board of Review in the year the exemption was claimed or the 

immediately succeeding year. An owner of property that is qualified agricultural 

property on May 1 for which an exemption was denied by the assessor in the 

year the affidavit was filed, may file an appeal with the July Board of Review for 

summer taxes or, if there is not a summer levy of school operating taxes, with 

the December Board of Review. 

 

 

 

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The way in which the assessor denies a qualified agricultural property exemption for the 

current year, and the appeal rights depends on the circumstances. Owners are always 

notified in writing of the denial. 

 

1. To deny a new claim for a qualified agricultural property exemption the State Tax 

Commission recommends the assessor deny the exemption by July 1 of the current 

year and that the owner be notified immediately in writing of the denial, the reason for 

the denial, and the owner’s rights of appeal to the July or December Board of Review. 

This denial and notification procedure also applies to a partial denial. Appeal of the 

July or December Board determination is to the Michigan Tax Tribunal within 35 days 

of the Board of Review action. 

 

2. To deny an existing qualified agricultural property exemption when preparing the 

annual assessment roll, the assessor eliminates the exemption from the assessment 

roll and notifies the property owner by mailing an assessment change notice at least 

10 days before the March Board of Review. This procedure also applies to partial 

denial or removal. The appeal is to the March Board of Review and then to the Tax 

Tribunal by July 31. 

 

3. To deny an existing qualified agricultural property exemption after the close of the 

March Board of Review, an assessor denies the exemption and notifies the owner 

immediately in writing of the denial, the reason for the denial, and the owner’s rights of 

appeal to the July or December Board of Review. This procedure also applies to a 

partial denial or removal. Appeal of the July or December Board determination is to the 

Michigan Tax Tribunal within 35 days of the Board of Review action 

 

An owner of property that was qualified agricultural property on May 1 for which an exemption 

was not on the tax roll may appeal to the July or December Board of Review. July and 

December boards of review have the power to grant the exemption for the current year (the 

year in which the appeal is made) and the immediately preceding year—provided the parcel 

in question otherwise qualified for the exemption for the year(s) involved. 

 

Classification Appeals 

 

If the March Board of Review changes a parcel’s classification to agricultural, the assessor 

must make that change on the assessment roll. The assessor must then consider if, and to 

what extent, the parcel’s new agricultural classification affects the parcel’s eligibility for the 

qualified agricultural property exemption. The change may have no effect at all if the parcel 

was already receiving this exemption or the homeowner’s principal residence exemption. 

 

 

 

 

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In addition, the parcel may not be entitled to a 100% qualified agricultural property exemption 

due to a commercial or industrial use on the parcel or a residence on the parcel that is not a 

related building, etc. If the classification change affects the parcel’s eligibility for the qualified 

agricultural property exemption, the assessor must change the assessment roll accordingly. 

 

If the STC changes a parcel’s classification to agricultural, the assessor must make that 

change on the assessment roll for the year covered by the determination. The assessor must 

also consider if, and to what extent, the parcel’s new agricultural classification affects the 

parcel’s eligibility for the qualified agricultural property exemption for the year covered by the 

Commission’s determination. The change may have no effect at all if the parcel was already 

receiving this exemption or the homeowner’s principal residence exemption. 

 

In addition, the parcel may not be entitled to a 100% qualified agricultural property exemption 

due to a commercial or industrial use on the parcel or a residence on the parcel that is not a 

related building, etc. If the classification change affects the parcel’s eligibility for the qualified 

agricultural property exemption, the assessor must change the assessment roll accordingly. 

The Treasurer must then issue a refund of any overpayment of taxes for the year covered by 

the determination. 

 

If an assessor determination or an appeal of a parcel’s classification results in a change of 

classification from agricultural to residential or commercial, etc., that change can cause the 

parcel to lose the qualified agricultural property exemption. Since agricultural classification 

makes a parcel eligible for the qualified agricultural property exemption, the change to 

something other than agricultural could eliminate the parcel’s eligibility to receive the qualified 

agricultural property exemption for the year of the classification change. 

 

Example: A 40-acre parcel has, 15 acres are planted in corn or soybeans with 25 acres a 

combination of swamp and woods, are not tillable, and are not devoted to an agricultural use 

and often used for hunting purposes. The assessor changed the classification from 

agricultural to residential. The property owner appealed the classification to the March Board 

of Review and then on to the State Tax Commission. The Commission determined the 

proper classification was residential. As a result of this classification change, the parcel is not 

entitled to the qualified agricultural property exemption; it is not classified agricultural and is 

not devoted primarily to an agricultural use, only 15 of the 40 acres, or 37.5 percent, are 

devoted to an agricultural use. 

 

Withdrawals and Rescissions 

 

Once a parcel is granted the qualified agricultural property exemption, the exemption remains 

in place until the end of the year in which the property is no longer qualified agricultural 

property (except in withdrawal and denial situations). Ownership is not relevant in 

determining whether a parcel continues to receive the qualified agricultural property 

exemption. 

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A withdrawal of a qualified agricultural property exemption removes the exemption for the 

year(s) involved, as if the exemption had never been granted and results in additional taxes 

being billed for the current and/or prior years (please see Bulletin 7 of 2007 in the Appendix 

for more information). A rescission removes all or a portion of the qualified agricultural 

property exemption for the next tax year and no additional taxes are billed. 

 

MCL 211.7ee(5) indicates that: 

 

Not more than 90 days after all or a portion of the exempted property is no 

longer qualified agricultural property, the owner shall rescind the exemption for 

the applicable portion of the property by filing with the local tax collecting unit a 

rescission form prescribed by the department of treasury. An owner who fails to 

file a rescission as required by this subsection is subject to a penalty of $5.00 

per day for each separate failure beginning after the 90 days have elapsed, up 

to a maximum of $200.00. This penalty shall be collected under 1941 PA 122, 

MCL 205.1 to 205.31, and shall be deposited in the state school aid fund 

established in section 11 of article IX of the state constitution of 1963. This 

penalty may be waived by the department of treasury. 

 

Not more than 90 days after all or a portion of property is no longer qualified agricultural 

property, the owner must file a rescission form with the local assessor; Request to Rescind 

Qualified Agricultural Property Exemption Form 2743. 

 

Note: The Request to Rescind Qualified Agricultural Property Exemption Form 2743 is filed 

by the property owner and is different from Form 3677 the Notice of Intent to Rescind the 

Qualified Agricultural Property Exemption. Form 3677 is filed by the prospective purchaser of 

the property within 120 days prior to the sale. 

 

MCL 211.7ee(8) indicates: 

 

If an exemption under this section is erroneously granted, an owner may 

request in writing that the local tax collecting unit withdraw the exemption. If an 

owner requests that an exemption be withdrawn, the local assessor shall notify 

the owner that the exemption issued under this section has been denied based 

on that owner's request. If an exemption is withdrawn, the property that had 

been subject to that exemption shall be immediately placed on the tax roll by 

the local tax collecting unit if the local tax collecting unit has possession of the 

tax roll or by the county treasurer if the county has possession of the tax roll as 

though the exemption had not been granted. A corrected tax bill shall be issued 

for the tax year being adjusted by the local tax collecting unit if the local tax 

collecting unit has possession of the tax roll or by the county treasurer if the 

county has possession of the tax roll. If an owner requests that an exemption 

MTT Docket No. 25-003108 

October 21, 2026 

Rebuttal P10-015

15 

 

under this section be withdrawn before that owner is contacted in writing by the 

local assessor regarding that owner's eligibility for the exemption and that 

owner pays the corrected tax bill issued under this subsection within 30 days 

after the corrected tax bill is issued, that owner is not liable for any penalty or 

interest on the additional tax. An owner who pays a corrected tax bill issued 

under this subsection more than 30 days after the corrected tax bill is issued is 

liable for the penalties and interest that would have accrued if the exemption 

had not been granted from the date the taxes were originally levied. 

 

An owner may request in writing to withdraw an exemption that was incorrectly granted under 

the provisions of MCL 211.7ee(8). The exemption is to be removed immediately from the tax 

roll(s) as if the exemption had not been granted. The local unit and the County treasurer are 

responsible for changing the tax roll(s) in their possession. A corrected tax bill for each 

affected tax year must be issued by the local unit and/or the County treasurer for the 

additional taxes caused by the removal of the qualified agricultural property exemption. 

Interest and penalties will not be added if the bill is paid within 30 days. 

 

 

 

 

 

 

 

 

 

 

 

 

 

MTT Docket No. 25-003108 

October 21, 2026 

Rebuttal P10-016

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