What does a state tax lien do?

A Notice of State Tax Lien filed at a county Register of Deeds becomes a public record. Credit reporting agencies, legal news services and newspapers may obtain and publish the lien information. As a result, creditors may gain knowledge that the Michigan Department of Treasury has a claim against your property, including property you acquired after the lien was filed. Courts and financial institutions may use the lien to establish a claim/priority in certain situations, such as bankruptcy proceedings or during the sale of real estate.

Caution!

It is important that the tax liability is resolved as quickly as possible before filing a lien becomes necessary.

A tax lien:

  • will have a negative effect on your credit rating and in most cases, property, (e.g. house, car) cannot be sold or transferred until the past-due tax is paid
  • is filed at a county Register of Deeds and becomes public record.
  • filed against an individual or business obtained by a credit reporting agency will remain part of their credit history for the next seven to ten years.