24-000011_Noto v Millington Twp.pdf
Sherrie Noto, Petitioner V Township Of Millington, Respondent · 24-004109-TT
Text extracted from the reviewed PDF, organized by page. OCR and reading order may contain errors; confirm details in the PDF below.
Page 1
STATE OF MICHIGAN GRETCHEN WHITMER GOVERNOR DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS LANSING MARLON I. BROWN, DPA DIRECTOR MICHIGAN TAX TRIBUNAL · 611 W. OTTAWA ST., LANSING, MI 48933 · 517-335-9760 PO BOX 30232, LANSING, MI 48909 · Other Carriers: 2407 N. GRAND RIVER AVE., LANSING, MI 48906 Sherrie Noto, MICHIGAN TAX TRIBUNAL Petitioner, SMALL CLAIMS DIVISION MTT Docket No. 24-000011 & 24-004109 v Case Type: Poverty Exemption Millington Township, Presiding Judge Respondent. Mark Perry FINAL OPINION AND JUDGMENT ORDER SEVERING 2024 TAX YEAR AND ASSIGNING IT DOCKET NUMBER 24-004109 Location of Hearing: Telephonic Hearing Held on: August 13, 2024 Appearances on Behalf of Petitioner: Sherrie Noto Appearances on Behalf of Respondent: Heather MacDermaid SUMMARY OF JUDGMENT The subject property shall not be granted a poverty exemption for the 2023 tax year. Given the above, the subject property’s taxable value (TV), for the tax year at issue, shall be as follows: Parcel Number: 017-031-000-4300-02 Year TV 2023 $48,660 The 2024 tax year shall be severed and assigned MTT Docket No. 24-004109. PROCEDURAL HISTORY Petitioner requested a poverty exemption before the 2023 December Board of Review (BOR) and 2024 March BOR. The BOR issued its decision on December 12, 2023.
Page 2
MTT Docket No. 24-000011 & 24-004109 Page 2 of 10 Petitioner filed a Petition with the Tribunal on January 3, 2024, and Respondent filed an Answer on February 8, 2024. Petitioner did request a poverty exemption from the 2024 March BOR.1 ISSUES AND APPLICABLE LAW The issue in this matter is whether Petitioner’s property qualifies for a property tax exemption due to reasons of poverty, pursuant to MCL 211.7u. The petitioner must prove, by a preponderance of the evidence, that it is entitled to an exemption.2 MCL 211.7u provides, in pertinent part: (1) The principal residence of persons, who, in the judgment of the supervisor and board of review, by reason of poverty, are unable to contribute toward the public charges is eligible for exemption in whole or in part from taxation under this act. This section does not apply to the property of a corporation. (2) To be eligible under this section, a person shall do all of the following on an annual basis… (e) Meet the federal poverty guidelines published in the prior calendar year in the Federal Register by the United States Department of Health and Human Services under its authority to revise the poverty line under 42 USC 9902, or alternative guidelines adopted by the governing body of the local assessing unit provided the alternative guidelines do not provide income eligibility requirements less than the federal guidelines. * * * (5) The board of review shall follow the policy and guidelines of the local assessing unit in granting or denying an exemption under this section. If a person claiming an exemption under this section is qualified under the eligibility requirements in subsection (2), the board of review shall grant the exemption in whole or in part, as follows: (a) A full exemption equal to a 100% reduction in taxable value for the tax year in which the exemption is granted. (b) A partial exemption equal to 1 of the following: 1 See MCL 205.737(5). 2 See ProMed Healthcare v Kalamazoo, 249 Mich App 490; 644 NW2d 47 (2002).
Page 3
MTT Docket No. 24-000011 & 24-004109 Page 3 of 10 (i) A 75%, 50% or 25% reduction in taxable value for the tax year in which the exemption is granted. (ii) As approved by the state tax commission, any other percentage reduction in taxable value for the tax year in which the exemption is granted, applied in a form and manner prescribed by the state tax commission. SUMMARY OF EVIDENCE A. Petitioner’s Evidence Petitioner’s contention of TV: Parcel Number: 017-031-000-4300-02 Year TV 2023 $0 2024 $0 Petitioner offered the following exhibits: 1. Evidence, filed on January 3, 2024 a. 2023 December BOR Affidavit, dated December 12,2023 2. Evidence, filed on July 5, 2024 a. 2024 March BOR Decision Based on the pleadings, admitted exhibits, and sworn testimony, Petitioner contends that it is eligible for a poverty exemption because her income is below Respondent’s income test threshold. Petitioner provided testimony that she owns and occupies the subject property as her principal residence. The real estate that she and her granddaughter occupy includes land and a used doublewide modular home. Three months after getting married, her husband passed away leaving her the real estate, a motorcycle, and she retained ownership of her 2015 Jeep Wrangler which she testified needs a new engine. Petitioner also testified that upon death of her husband, he still owed $11,000 on an existing land contract for the land only, and the used modular home was paid in full. As a means to pay down a portion of the outstanding land contract, the vendor agreed to accept her husband’s motorcycle in exchange for reducing Petitioner’s outstanding land contract amount to $6,000. Petitioner also testified that she is disabled with a rare form/type of diabetes requiring her minor granddaughter to live with her essentially being present twenty-four/seven in the home due to possible seizures and potential of falling into a comma when blood sugar levels drop without warning. Due to her disability, Petitioner testified she receives
Page 4
MTT Docket No. 24-000011 & 24-004109 Page 4 of 10 about $824 per month in social security benefit, about $100 per month in supplemental social security insurance, and supplemental food assistance. Accordingly, pursuant to Respondent’s poverty exemption income test guidelines, Petitioner provided testimony her 2023 income was $11,088. The Tribunal inquired if Petitioner’s granddaughter is a permanent resident of the household and whether she works or maintains a job outside the home, Petitioner responded that her granddaughter does not have a job and is a full-time student receiving her education through online distant learning carrying 10 credits per semester. Petitioner testified that when she originally claimed a poverty exemption, she was denied by Respondent because the subject property did not have a principal residence exemption (PRE) in which she later reapplied and was granted a PRE. After resolving the PRE issue, she testified she was denied a poverty exemption by the 2023 December BOR because she owned a vehicle, 2015 Jeep Wrangler, in which the value exceeded the maximum asset value established by Respondent’s asset test. She also testified she claimed a 2024 poverty exemption, and the 2024 March BOR denied her claim because the vehicle’s value exceeded Respondent’s asset test. The Tribunal inquired what was the value the BOR assigned to her vehicle, Petitioner responded that she did not know and that the Jeep needed a new engine. B. Respondent’s Evidence The property’s TV, as confirmed by the BOR, for the tax years at issue: Parcel Number: 017-031-000-4300-02 Year TV 2023 $48,660 2024 $95,100 Respondent offered the following exhibits: 1. Evidence, filed on February 8, 2024 a. 2023 December BOR Affidavit, dated December 12, 2023 b. Application for MCL 211.7u Poverty Exemption, dated August 23, 2023 c. Respondent’s federal poverty income test guidelines with handwritten note that Petitioner’s income was $11,088 d. Affirmation of Ownership and Occupancy to Remain Exempt by Reason of Poverty, dated August 23, 2023 e. Respondent’s resolution to adopt poverty exemption income guidelines and asset test 2. Evidence, filed on July 10, 2024 a. Respondent’s letter advising Tribunal docket number 24-002617 is Petitioner’s duplicate appeal for tax year 2024 No exhibits were excluded from evidence.
Page 5
MTT Docket No. 24-000011 & 24-004109 Page 5 of 10 Based on the pleadings, admitted exhibits, and sworn testimony, Respondent contends that the December BOR denied the poverty exemption because the subject property did not have a PRE, and Petitioner’s assets exceed Respondent’s asset test. In a prepared statement, Respondent contends: The Petitioner applied for a poverty exemption for 2023 at the December Board of Review on December 12, 2023. At that time, she did not have a Principal Residence Exemption. She later filed on December 14, 2023. Petitioner purchased the property on June 6, 2023. She was denied for the poverty exemption for the property not being her principal residence and for exceeding Millington Township's asset test, which is attached. Respondent’s representative provided testimony that the December BOR denied the poverty exemption due to not having a PRE and assets exceeded Respondent’s asset test. Even though the PRE issue was resolved, the 2024 March BOR denied the poverty exemption because the vehicle’s value exceeded the maximum allowable household value. The Tribunal inquired the Kelly Blue Book (KBB) amount the BOR assigned to the vehicle, Respondent’s representative responded she did not know. FINDINGS OF FACT The following facts were proven by a preponderance of the evidence: 1. The subject property is located at 7397 Willard Road in Tuscola County. 2. The subject property is classified as Residential-Real Property. 3. Petitioner is an owner of the subject property. 4. Petitioner did occupy the subject property as a principal residence. 5. Petitioner submitted an application requesting a poverty exemption to the 2023 December BOR. 6. Petitioner submitted an application requesting a poverty exemption to the 2024 March BOR. 7. The number of persons residing in the subject household was two. 8. The “federal poverty guidelines” or alternative guidelines adopted by Respondent for the subject household for tax year provide for an income level of $18,310. 9. Respondent did not provide the federal poverty guidelines or alternative guidelines adopted by Respondent for tax year 2024. 10. Petitioner’s 2022 annual household income pursuant to MCL 211.7u is $11,088. 11. Respondent has adopted an “assets test” deduction for tax year 2023 of the first $5,000 of total household asset value. 12. Respondent has adopted an “asset test” for tax year 2023 that provides for the maximum household asset value of $6,000. 13. Respondent did not provide a copy of the 2024 asset test. 14. The value of Petitioner’s household assets for tax year 2023 as determined by the 2023 December BOR is unknown, and the parties did not provide documentary valuation evidence nor testimony.
Page 6
MTT Docket No. 24-000011 & 24-004109 Page 6 of 10 CONCLUSIONS OF LAW The following authority and reasoned opinion supports the Tribunal’s determination: Petitioner is claiming a poverty exemption under MCL 211.7u. A petitioner must prove, by a preponderance of the evidence, that they are entitled to an exemption.3 A “preponderance of evidence” is “such evidence as, when weighed with that opposed to it, has more convincing force, and from which it results that the greater probability is in favor of the party upon whom the burden rests.”4 Here, Petitioner contends they are financially stressed and unable to contribute toward the public charges due to limited income received from disability benefits. Conversely, Respondent’s BOR has determined that Petitioner has provided insufficient documentation establishing the total household assets does not exceed Respondent’s maximum allowable household assets. Respondent does not dispute Petitioner is the owner and occupies the subject property. Respondent does not dispute Petitioner’s income is less than the maximum amount allowed under Respondent’s income test. Respondent does maintain the total value of Petitioner’s household assets exceed Respondent’s asset test eligibility. Pursuant to MCL 211.7u, a person who is unable to contribute to the public charge may be eligible for an exemption in part or whole from property taxes levied against that person’s principal residence. To claim the exemption, a person must file an application with the BOR and must also meet an income and asset test established by the governing body of their local assessing unit. In turn, local units of government are also required to take certain actions, including adopting a policy and guidelines to use in determining whether a person qualifies for the exemption. Regarding tax year 2023, Petitioner did not provide any evidence of income and assets; thus, relying on documentary evidence submitted by Respondent. For the 2023 tax year, with a household of two people, Respondent’s maximum income poverty guideline was $18,310. According to Petitioner’s poverty exemption application provided by Respondent, she receives total monthly social security benefits in the amount of $924 for an annual income of $11,088. The parties agree Petitioner’s annual household income does not exceed Respondent’s income guideline. Also, for the 2023 tax year, with a household of two or more people, Respondent’s maximum household asset test poverty guideline was $6,000. Specific to Respondent’s motor vehicle guideline, the first $5,000 of the vehicle’s value is deducted from the KBB estimated value. Both parties testified that Petitioner’s poverty exemption was denied by Respondent’s BOR because Petitioner’s total household assets exceed Respondent’s asset test 3 ProMed Healthcare v Kalamazoo, 249 Mich App 490; 644 NW2d 47 (2002). 4 Martucci v Ballenger, 322 Mich 270; 33 NW2d 789 (1948); Hanna v McClave, 273 Mich 571, 263 NW 742 (1935), Hoffman v Loud, 111Mich 156; 69 NW 231 (1896).
Page 7
MTT Docket No. 24-000011 & 24-004109 Page 7 of 10 guideline. Respondent’s representative testified the BOR denied the poverty exemption because in the opinion of the BOR, Petitioner’s vehicle exceeds the asset test. But when Tribunal inquired what value the BOR assigned to the vehicle, Respondent’s representative replied she did not know what was their assigned vehicle value, but she did know that they relied on the KBB value estimate as dictated by Respondent’s adopted poverty exemption guidelines. Respondent’s representative did not provide testimony as to whether the source origin of the KBB estimate was from KBB’s publicly available website or printed hardcopy booklet, and did not testify whether the KBB estimate took into account for high mileage and claim that the engine needed to be replaced. Along similar lines, while the burden of proof rests on Petitioner, Petitioner also did not provide KBB valuation evidence demonstrating that the vehicle does not exceed Respondent’s asset test, only that her Jeep needs a new engine. Even though income is not at issue, only assets, Petitioner asks the Tribunal to grant the exemption because they cannot afford the taxes. However, the Tribunal has no equitable power to waive or otherwise disregard Respondent’s poverty exemption guidelines, and as a result, it has no authority to grant Petitioner the relief requested. The Tribunal’s powers are limited to those authorized by statute and do not include powers of equity.5 There is no evidence establishing that Respondent’s adopted guidelines provide for partial exemptions due to asset value exceeding the maximum allowable amount. As such, the Tribunal has no authority to grant a full or partial exemption, and the Tribunal can no longer depart from locally adopted guidelines under “substantial and compelling reasons,” as that statutory provision was removed from MCL 211.7u as of the most recent amendment. Petitioner has not met the burden of establishing entitlement to the poverty exemption, and it shall remain denied. Regarding tax year 2024, the parties agreed at the hearing that Petitioner applied for a poverty exemption at Respondent’s 2024 March BOR, and that the BOR denied the exemption. However, Petitioner was not explicitly asked whether they wanted the 2024 appeal to proceed at the subject hearing, as was their right. Further, and after the conclusion of the hearing, the Tribunal found that the 2024 tax year was appealed separately and assigned MTT Docket No. 24-002716. Once found, that appeal was dismissed because the 2024 tax year was properly pending in this case. It is unclear whether the parties were aware that they had the full and fair opportunity to make contentions with respect to the 2024 exemption denial at the hearing in this case. In order to protect the parties’ due-process rights, the Tribunal finds that the 2024 tax year should be severed from this case into a new docket. Based upon the findings of fact and conclusions of law, the property’s 2023 TV is as listed in the Summary of Judgment section of this Final Opinion and Judgment. The 2024 tax year shall be severed to allow the parties a full and fair opportunity to litigate that issue at hearing prior to a Tribunal determination. Therefore, 5 Electronic Data Systems Corp v Township of Flint, 253 Mich App 538, 547-548; 656 NW2d 215, 221 (2002)
Page 8
MTT Docket No. 24-000011 & 24-004109 Page 8 of 10 JUDGMENT IT IS ORDERED that the property’s TV for the tax year at issue shall be as set forth in the Summary of Judgment section of this Final Opinion and Judgment. IT IS FURTHER ORDERED that the 2024 tax year shall be SEVERED and assigned Docket No. 24-004109. IT IS FURTHER ORDERED that Petitioner shall file a petition pertaining to the 2024 tax year within 21 days of the entry of this Order.6 The petition shall note the docket number assigned by the Tribunal for the 2024 tax year and if filed utilizing the Tribunal’s e-filing system, must be filed on the assigned 2024 docket number as a “Severed Petition.” IT IS FURTHER ORDERED that the Tribunal shall issue a Notice of Docket after receipt of Petitioner’s petition. IT IS FURTHER ORDERED that the officer charged with maintaining the assessment rolls for the 2023 tax year at issue shall correct or cause the assessment rolls to be corrected to reflect the property’s poverty exemption within 20 days of the entry of this Final Opinion and Judgment, subject to the processes of equalization.7 To the extent that the final level of assessment for a given year has not yet been determined and published, the assessment rolls shall be corrected once the final level is published or becomes known. IT IS FURTHER ORDERED that the officer charged with collecting or refunding the affected taxes shall collect taxes and any applicable interest or issue a refund within 28 days of entry of this Final Opinion and Judgment. If a refund is warranted, it shall include a proportionate share of any property tax administration fees paid and penalty and interest paid on delinquent taxes. The refund shall also separately indicate the amount of the taxes, fees, penalties, and interest being refunded. A sum determined by the Tribunal to have been unlawfully paid shall bear interest from the date of payment to the date of judgment, and the judgment shall bear interest to the date of its payment. A sum determined by the Tribunal to have been underpaid shall not bear interest for any time period prior to 28 days after the issuance of this Final Opinion and Judgment. Pursuant to MCL 205.737, interest shall accrue (i) after December 31, 2013, through June 30, 2016, at the rate of 4.25%, (ii) after June 30, 2016, through December 31, 2016, at the rate of 4.40%, (iii) after December 31, 2016, through June 30, 2017, at the rate of 4.50%, (iv) after June 30, 2017, through December 31, 2017, at the rate of 4.70%, (v) after December 31, 2017, through June 30, 2018, at the rate of 5.15%, (vi) after June 30, 2018, through December 31, 2018, at the rate of 5.41%, (vii) after 6 Alternatively, the petition may be downloaded from the Tribunal’s website and mailed to the Tribunal via United States Postal Service at: Michigan Tax Tribunal, PO BOX 30232, Lansing, MI 48909. The petition may also be delivered to the Tribunal via overnight carrier (UPS, FedEx, or DHL) at: Michigan Tax Tribunal, 2nd Floor MTT, 2407 N. Grand River Avenue, Lansing, MI 48933. 7 See MCL 205.755.
Page 9
MTT Docket No. 24-000011 & 24-004109 Page 9 of 10 December 31, 2018 through June 30, 2019, at the rate of 5.9%, (viii) after June 30, 2019 through December 31, 2019, at the rate of 6.39%, (ix) after December 31, 2019, through June 30, 2020, at the rate of 6.40%, (x) after June 30 2020, through December 31, 2020, at the rate of 5.63%, (xi) after December 31, 2020, through June 30, 2022, at the rate of 4.25%, (xii) after June 30, 2022, through December 31, 2022, at the rate of 4.27%, (xiii) after December 31, 2022, through June 30, 2023, at the rate of 5.65%, (xiv) after June 30, 2023, through December 31, 2023, at the rate of 8.25%, (xv) after December 31, 2023, through June 30, 2024, at the rate of 9.30%, and (xvi) after June 30, 2024, through December 31, 2024, at the rate of 9.50%. This Final Opinion and Judgment resolves all pending claims in this matter and closes this case. APPEAL RIGHTS If you disagree with the final decision in this case, you may file a motion for reconsideration with the Tribunal or a claim of appeal with the Michigan Court of Appeals. A motion for reconsideration must be filed with the Tribunal with the required filing fee within 21 days from the date of entry of the final decision. Because the final decision closes the case, the motion cannot be filed through the Tribunal’s web-based e-filing system; it must be filed by mail or personal service. The fee for the filing of such motions is $50.00 in the Entire Tribunal and $25.00 in the Small Claims Division, unless the Small Claims decision relates to the valuation of property and the property had a principal residence exemption of at least 50% at the time the petition was filed or the decision relates to the grant or denial of a poverty or disabled veterans exemption and, if so, there is no filing fee. You are required to serve a copy of the motion on the opposing party by mail or personal service or by email if the opposing party agrees to electronic service, and proof demonstrating that service must be submitted with the motion. Responses to motions for reconsideration are prohibited and there are no oral arguments unless otherwise ordered by the Tribunal. Alternatively, you may file a claim of appeal with the Michigan Court of Appeals. If the claim is filed within 21 days of the entry of the final decision, it is an “appeal of right.” If the claim is filed more than 21 days after the entry of the final decision, it is an “appeal by leave.” A copy of the claim of appeal must be filed with the Tribunal to certify the record on appeal. There is no certification fee. By _______________________________________ Date Entered by Tribunal:
Page 10
MTT Docket No. 24-000011 & 24-004109 Page 10 of 10 PROOF OF SERVICE I certify that a copy of the foregoing was sent on the entry date indicated above to the parties or their attorneys or authorized representatives, if any, utilizing either the mailing or email addresses on file, as provide by those parties, attorneys, or authorized representatives. By: Tribunal Clerk