July 30, 1998
Due to the number of questions received regarding the taxability of a conveyance
of an easement, a request for advice was submitted to the Revenue Division of the
Department of the Attorney General. The following is a reprint of the advice received from
the Revenue Division. This advice does not constitute an opinion of the Attorney General
and may not be relied upon as such.
You have requested my advice as to whether the conveyance of an easement is subject to
the county real estate transfer and state real estate transfer tax.
Both the County Real Estate Transfer Tax Act, 1966 PA
134, MCL 207.501 et seq.
And the State Real Estate Transfer Tax Act, 1993 PA
330, MCL 207.521 et seq. Impose
a tax upon, inter alia:
"Deeds or instruments of conveyance of real property or any interest in property,
for consideration." 1996 PA 134, § 2 (county tax), and 1993 PA 330, § 3 (state
tax).
In Michigan an easement, whether appurtenant or in gross, is an interest in real
property. Ladd v Teichman; 359 Mich 587; 103 NW2d 338 (960); Peaslee v Saginaw
County Drain Commissioner, 365 Mich 338; 112 NW2d 562.
Accordingly, unless otherwise exempted by law, the conveyance of an easement is taxable
under each act when the instrument of conveyance is offered to the Register of Deeds for
recordation.
With respect to exemptions, both acts, exempt, inter alia:
"A written instrument evidencing [the transfer of] an interest that is assessable
as personal property." 1966 PA 134, § 5(f) (county tax), and 1993 PA 330, § 6(f)
(state tax).
Under provisions of the General Property Tax Act, § 8, 1893 PA 206, § 8, MCL
211.8:
"For purposes of taxation, personal property shall include:(g) The personal
property of gas and coke companies, natural gas companies, electric light companies,
waterworks companies, hydraulic companies, and pipe line companies transporting oil and
gas as public or common carriers, to be assessed in the township, village, or city where
the personal property is located. The mains, pipes, supports, and wires of these
companies, including the supports and wire or other line used for communication purposes
in the operation of those facilities, and the rights of way and the easements or other
interests in land by virtue of which the mains, pipes, supports, and wires are erected and
maintained, shall be assessed as personal property in the township, village, or city where
laid, placed, or located."
The quoted provisions, classify only certain easements for ad valorem property tax
purposes as personal property. These easements, held by gas and coke companies, natural
gas companies, electric light companies, waterworks companies, hydraulic companies, and
pipeline companies transporting oil or gas as public or common carriers are exempt from
the transfer taxes.
Of course, a conveyance of an interest in real property, whether an easement or another
interest in real property, may be exempt for other reasons set forth in the acts here
discussed.
This memorandum does not, however, discuss the other basis for exemption but rather
conveys the advice that:
(a) An instrument conveying an easement is subject to the taxes imposed by both the
County Real Estate Transfer Tax Act and the State Real Estate Transfer Tax Act unless
expressly exempted by law, and(b) Among those certain easements exempted by law are
certain easements taxed as personal property under Section 8 of the General Property Tax
Law.
The instrument, a copy of which you have provided me, conveys an "avigation
easement" pursuant to which the grantors, husband and wife, for a consideration in
excess of $100.00 granted to a public airport authority:
An easement and right of way for the free, unobstructed passage of aircraft, ...in and
through the airspace over and across those parts of the grantor's lands described in the
document.
The grantors are subject to the taxes imposed by 1966 PA 134, supra, and 1993 PA
330, supra. I find no provision of either act which would exempt the grantors from
the taxes.
This memorandum sets forth the advice of the Revenue Division of the Department of The
Attorney General. The memorandum is not an expression of an opinion by the Attorney
General himself.
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