Summer Property Tax Schedule and Payment Information

> What is the schedule?
> What if I make payment after September 14th?
> What if I live in a city which, by charter, requires summer property taxes to be paid before or after September 14th?
> How can I confirm the payment was received?
> What if I did not receive a tax bill - am I still liable for the tax?
> Will the county or local collecting unit impose an administration fee for collecting the tax on behalf of a local unit of government?

Will the county or local collecting unit impose an administration fee for collecting the tax on behalf of a local unit of government?
The County Treasurers are required to impose an administration fee. Section 5b(4) of the State Education Tax Act provides that "[t]he tax levied under this act collected pursuant to this subsection [by either the State Treasurer or county treasurers] is subject to a 1% administration fee." The General Property Tax Law provides that a local property tax collecting unit may add a property tax administration fee of not more than 1% of the total tax bill per parcel.

General State Education Tax Information

> How is the SET Calculated?
> What does the SET fund?

How is the SET Calculated? 
Property owners are assessed 6 mills on the taxable value. For example, if you have a taxable value of $50,000, the amount of SET due is $300.00 ($50,000 multiplied by .006).

What does the SET fund? 
The SET is deposited to the School Aid Fund for distribution to Michigan public K-12 schools. This tax makes up about 15% of the total School Aid Fund. This tax is separate from any local school bond, community college, or voted mill issue.

Summer Property Tax Deferment

> Summer Tax Deferment Form - Fillable
> Can I defer payment of my summer property tax?
> What type of property is eligible for property tax deferment?
> What is included in total household income for the purposes of summer property tax deferment?
> Where do I file a summer property tax deferment form?
> Who reviews and approves the tax deferment this summer?
> Can a corporation, LLC, or partnership defer summer taxes?
> When do I have to pay the deferred summer taxes?

Can I defer payment of my summer property tax? 
An owner of eligible property may file a completed summer property tax deferment form with his or her city or township treasurer by September 15. A valid deferment permits summer property taxes to be paid by February 14 without any additional penalty interest.

What type of property is eligible for property tax deferment? 
Taxpayers may defer their summer SET if they meet the following criteria. Payment may be deferred until February 14. Homestead property owned by a taxpayer who:

• Has a total household income of $40,000 or less and;
• is totally and permanently disabled, blind, paraplegic, quadriplegic; or
• an eligible serviceperson, eligible veteran, or eligible widow or widower; or
• is at least 62 years 

Agricultural real property, if the gross receipts of the agricultural or horticultural operations in the previous year, or the average gross receipts of the operations in the previous three years, are not less than the total household income of the owner in the previous year.

What is included in total household income for the purposes of summer property tax deferment?
Household Income is the total income (taxable and nontaxable) of both spouses or of a single person maintaining a household and other sources of income for all individuals living in the household.

It is your Adjusted Gross Income (AGI), plus all income exempt or excluded from AGI. Total household income includes - wages, salaries, tips; net income from a business, rent or farm; Social Security less the amount deducted for Medicare premiums; SSI (Supplemental Security Income), DHS (Department of Human Services) and FIP (Family Independence Program) benefits; child support; alimony; unemployment, workers' and veterans' disability compensation; pension benefits; interest income; gifts and winnings in excess of $300.00 and other sources of income.

Household income does NOT include:

• Payments received by participants in the foster grandparent or senior companion program
• Energy assistance grants
• Government payments to a third party (e.g., a doctor) Note: If payment is made from money withheld from your benefit, the payment is part of household income. (For example, the DHS may pay your rent directly to the landlord.)
• Money received from a government unit to repair or improve your homestead
• Surplus food or food stamps
• State and city income tax refunds and homestead property tax credits
• Chore service payments (these payments are income to the provider of the service)
• The first $300 from gambling, bingo, lottery, awards or prizes
• The first $300 in gifts, cash or expenses paid on your behalf by a family member or friend
• Amounts deducted from Social Security or Railroad Retirement benefits for Medicare premiums
• Life, health and accident insurance premiums paid by your employer. However, if you pay medical insurance or Health Maintenance Organization (HMO) premiums for you or your family, you may deduct the cost from household income.
• Loan proceeds
• Inheritance from a spouse
• Life insurance benefits from a spouse.

Where do I file a summer property tax deferment form?
As the property owner you must file your deferment form with your local treasurer and should keep a copy for your records.

Who reviews and approves the tax deferment this summer?
Your local treasurer will review the submitted tax deferment forms for completeness. If as the property owner you are requesting a summer tax deferment, you will be responsible for determining that you qualify for the deferment. If the deferment form contains any misleading or false statements, as the property owner you may be subject to penalties and late payments on the taxes deferred.

Can a corporation, LLC, or partnership defer summer taxes?
No. A corporation, LLC, or partnership does not satisfy the deferment requirements of the General Property Tax Act (MCL 211.51) with respect to homestead property (i.e., an owner must also be a totally and permanently disabled, blind, paraplegic, quadriplegic, an eligible serviceperson, eligible veteran, or eligible widow or widower, or who is at least 62 years of age), nor the household gross income requirement of $40,000 or less. A corporation also would not meet the following requirement for agricultural property for deferment, as this is based on the household income of the owner and not the income or profits of a corporation: " . . . if the gross receipts of the agricultural or horticultural operations in the previous year or the average gross receipts of the operations in the previous 3 years are not less than the household income of the owner in the previous year."

When do I have to pay the deferred summer taxes?
Payment is due by no later than February 14. Interest and penalty payments are not accessed for the deferment period. Cities and townships may allow certain homeowners and farmers to pay deferred property taxes in the last two weeks of February without penalty or interest (see MCL 211.44(3)). County boards of commissioners may allow certain homeowners to pay deferred property taxes before May 1 without penalty or interest (see MCL 211.59(3)). Contact your local collecting treasurers for more information. 

Information for Local Treasurers

> Who can keep the $2.50 per billable parcel and what can it be used for?
> Who can keep the interest that is earned on State Education Tax payments while those funds are in the possession of the city, township, or county treasurer?
> Who can keep the monthly interest and late penalty that is imposed before March 1 on late State Education Tax (SET) payments?
> SET certification of 6 mill tax levy
> State Treasurer's Certification Letter of the SET Levy
> If a school district or intermediate school district adopts a resolution to issue a summer property tax levy - who has to collect the State Education Taxes and County Allocated Mills?
> If a school district has elected to issue a summer tax levy, and cannot reach agreement with a township or city to act as the tax collector, can the school district enter into an agreement with the county to only collect the school district summer tax levy?
> If a school district or Intermediate School District elects to impose a summer levy, what is the deadline by which a school district has to determine who will be the summer tax collector?
> If a school district reaches agreement with the city, township, or county to collect a school district summer levy, and the tax collector currently retains a $2.50 per billable parcel for the State Education Tax collection, will the agreement jeopardize the $2.50 State Education Tax retaining fee?
> What if a local unit is collecting a summer tax levy for a school district and it impacts only a portion of the taxing unit - because the school district does not encompass the whole local unit? How is the $2.50 retaining fee applied?
> Can there be more than one tax roll for a local unit?
> What if the school district or Intermediate School District elects to eliminate the summer tax levy ? will the tax collector then be able to retain the $2.50 per billable parcel fee after the summer school district tax levy is eliminated?
> When does district library debt millage have to be collected?
> Can a township keep earned interest on county allocated mills tax payments prior to the time of remittance to the county treasurer?

Who can keep the $2.50 per billable parcel and what can it be used for?
If a county, city, or township collects the State Education Tax (SET) this summer, and is not collecting any other summer property taxes for the taxing unit, except the county allocated mills and/or village taxes, the law (MCL 211.905b) provides that the county, city, or township shall retain $2.50 for each parcel of property that is billed the SET before transmitting the SET collected. 

The law is clear that the SET collecting unit shall also collect the county allocated mills as required by MCL 211.44a. As long as a taxing unit is only collecting the SET, county allocated mills, and/or village taxes, the unit is eligible to retain the $2.50 per billable parcel.    

The amount may only be used to defray any costs the treasurer's office incurs resulting from the early collection of the SET. Eligible costs include those costs associated with the early collections of the SET such as additional hours worked by local treasurers or related staff, supplies or materials related to the printing and mailing of the tax bills, and the processing of payments received.

Bonus compensation for summer tax collections should not occur unless it is part of the initial salary resolution or authorized within statutory procedures for an increase in salary. Article XI, Section 3 of the Michigan Constitution states, "Neither the legislature nor any political subdivision of this state shall grant or authorize extra compensation to any public officer, agent or contractor after the service has been rendered or the contract entered into."

Who can keep the interest that is earned on State Education Tax payments while those funds are in the possession of the city, township, or county treasurer?
The law allows local and county treasurers to keep the earned interest on State Education Tax (SET) payments prior to the time of remittance.

• Background: The general rule is that interest follows principal, unless there is statutory language to the contrary. In 1985, the Court of Appeals in Grand Rapids Public Schools v City of Grand Rapids (146 MICH APP 652) held that "Interest on public funds designated for a specific purpose follows those funds, absent a clear statutory provision to the contrary, in general, interest is merely an incident of the principal fund, making it the property of the party owning the principal." 

• County treasurers have the authority to keep earned interest on the SET. MCL 211.43(10), which was added by Public Act 253 of 1994, provides that "The county treasurer may retain the interest earned on the money collected under Act No. 331 of the Public Acts of 1993 while held by the county treasurer, as reimbursement for the cost incurred by the county in collecting and transmitting the tax imposed by that act." 

• Township and city treasurers have authority to keep earned interest on the SET. MCL 211.43c provides that "Notwithstanding section 43, if there is not an agreement for alternative schedules for delivering interest earned, the local tax collecting unit shall retain interest earned on the collections of the state education tax levied under the state education tax act, Act No. 331 of the Public Acts of 1993, being sections 211.901 to 211.906 of the Michigan Compiled Laws, while in the possession of the local tax collecting unit."  

Who can keep the monthly interest and late penalty that is imposed before March 1 on late State Education Tax (SET) payments?  
If a county, city, or township collects the State Education Tax (SET) this summer, county allocated mills and/or village taxes, and is not collecting any other summer property taxes, the monthly interest and late penalty imposed before March 1 on late SET payments must be transferred to the State Treasurer. (MCL 211.905b(9))

If a school district or intermediate school district adopts a resolution to issue a summer property tax levy - who has to collect the State Education Taxes and County Allocated Mills? 
Beginning in 2003, any school or intermediate school district that elects to levy a summer tax, is obligated under the General Property Tax Act to also collect the State Education Tax (SET) and the county allocated mills. The School may enter into a contractual agreement as allowed by law (MCL 380.1613) for another local unit to act as the summer tax collector; however the tax collector is obligated to collect not just the school summer tax levy, but also the SET and the county allocated mills. 

The State Education Tax Act specifically provides that (MCL 211.905(4)) "Beginning in 2003, if a school district or intermediate school district collects taxes in the summer under section 1613 of the revised school code of 1976, 1976 PA 451, MCL 380.1613, the school district or intermediate school district shall collect the taxes levied under this act in the summer and shall distribute the taxes collected as provided in this act."

As provided by MCL 211.44a(1) - the treasurer that collects the state education tax shall collect the summer property tax levy under this section - being the county allocated mills.

If a school district has elected to issue a summer tax levy, and cannot reach agreement with a township or city to act as the tax collector, can the school district enter into an agreement with the county to only collect the school district summer tax levy?
No. A school district that has a summer tax levy is obligated also to collect the State Education Tax and county allocated mills. A taxpayer should receive only one summer property tax bill. While the school district may enter into a contractual agreement as allowed by law (MCL 380.1613) for another local unit to act as the summer tax collector; the tax collector is obligated to collect not just the school district summer tax levy, but also the State Education Tax and the county allocated mills.

The State Education Tax Act specifically provides that (MCL 211.905(4)) "(b)eginning in 2003, if a school district or intermediate school district collects taxes in the summer under section 1613 of the revised school district code of 1976, (1976 PA 451, MCL 380.1613), the school district or intermediate school district shall collect the taxes levied under this act in the summer and shall distribute the taxes collected as provided in this act."

As provided by MCL 211.44a(1) - the treasurer that collects the State Education Tax is required to collect the county allocated mills.

If a school district or Intermediate School District elects to impose a summer levy, what is the deadline by which a school district has to determine who will be the summer tax collector?
The deadline is April 1. As provided by the Revised School district Code (MCL 380.1613), the school district would need to reach agreement with the local tax collecting unit. If an agreement cannot be reached with the local tax collecting unit, then an agreement could be reached with the county to act as tax collector. If an agreement cannot be reached with either the local unit or the county, then the school district could elect to collect its summer tax levy, the State Education Tax (MCL 211.905), and the county allocated mills (MCL 211.44a).

If a school district reaches agreement with the city, township, or county to collect a school district summer levy, and the tax collector currently retains a $2.50 per billable parcel for the State Education Tax collection, will the agreement jeopardize the $2.50 State Education Tax retaining fee?
Yes. A township, city, or county that is eligible for the $2.50 retaining fee under the State Education Tax Act (specifically, MCL 211.905b) may only retain the $2.50 for those billable parcels for which the only taxes billed are the State Education Tax, county allocated, and/or village taxes. Therefore, for those parcels that are also billed for a school district summer tax levy, the $2.50 per billable parcel retaining fee is no longer allowed.

What if a local unit is collecting a summer tax levy for a school district and it impacts only a portion of the taxing unit - because the school district does not encompass the whole local unit? How is the $2.50 retaining fee applied?
The State Education Tax Act provides that the township, city, or county may retain the $2.50 per billable parcel when only the State Education Tax, county allocated, and/or village taxes are billed.

MCL 211.905b specifically provides that "(t)his section applies only to a city or township, or that portion of a city or township, in which no property taxes, other than" the State Education Tax, county allocated, and/or village taxes are levied.

As more than one school district may be located in a tax collecting unit, and a school district may not encompass the whole taxing unit, for those parcels where school district taxes are being levied in the summer, the $2.50 retaining fee may not be applied, but the $2.50 retaining fee may be applied to the other parcels in the taxing unit where only the State Education Tax, county allocated, and/or village taxes are billed.

Can there be more than one tax roll for a local unit?
It is possible to have more than one tax roll per local unit. For example, if there were three school districts within the boundary of a township:

• School District A does not elect to levy a summer school tax.

• School District B wants a summer tax levy and is able to reach agreement with the township to collect the school district summer tax levy.

• School District C does not reach agreement with the township, but does reach agreement with the county.

This would result in two tax rolls and two tax collectors for the property owners within the boundary of one township:

• Township: Collects for residents in School District A - only the State Education Tax, the county allocated, and/or village taxes. Collects for residents in School District B - the school district summer tax levy, State Education Tax, the county allocated, and/or village taxes.

• County: Collects for residents in School District C - the school district summer tax levy, State Education Tax, the county allocated, and/or village taxes.

What if the school district or Intermediate School District elects to eliminate the summer tax levy - will the tax collector then be able to retain the $2.50 per billable parcel fee after the summer school district tax levy is eliminated?
Yes - as long as there are no other summer taxes being collected, only State Education Tax, county allocated, and/or village taxes.

When does district library debt millage have to be collected?
The District Library Financing Act, Act 265 of 1988, specifically MCL 397.288, provides that the taxes shall be levied and collected with the county taxes. When this section was enacted, county taxes were collected exclusively in the winter. MCL 211.44a established a shift to a summer tax collection for county allocated mills beginning with the 2005 summer tax collection. Most counties still have other mills being levied as part of the winter taxes. For those counties with a winter tax, the district library debt mills may still be collected as part of the winter property taxes.

If a district library has voter approval to issue new debt mills, or elects to shift the debt mills to a summer tax collection, this could impact potential revenue for the tax collector. A township, city, or county may be eligible to retain a $2.50 per billable parcel fee related to summer tax collection if collecting only the State Education Tax, county allocated mills, and/or village taxes.

Can a township keep earned interest on county allocated mills tax payments prior to the time of remittance to the county treasurer?
No. The General Property Tax Act does not give express authority to keep the interest earned while the township treasurer is holding county allocated mills prior to the time of remittance to the county treasurer for the county allocated mills. The township treasurer is required to remit payments within 10 business days after the first and fifteenth day of each month.