(Supplemented by STC Bulletin 3 of 1997 and STC Bulletin 9 of 2002)

This version of STC Bulletin 9 of 1995 has been modified to facilitate posting to the web.

February 23, 1995
Property Classification

TO: Assessors, Equalization Directors

FROM: State Tax Commission

RE: CLASSIFICATION OF PROPERTY AS REQUIRED BY MICHIGAN COMPILED LAW (MCL) 211.34

MCL 211.34C addresses the assessment roll classification of property assessable under the general property Tax Act. This section of the General Property Tax Act was enacted in 1978.

It has come to the attention of the State Tax Commission that some assessors and Boards of Review are not classifying properties in accordance with MCL 211.34c but are being influenced by the effect that a particular classification might have on the property's exempt status as a homestead or as qualified agricultural property. THE LAW DOES NOT ALLOW CLASSIFICATION FOR PROPERTY TAX ASSESSMENT PURPOSES TO BE MADE BY STANDARDS OTHER THAN THOSE FOUND IN MCL 21.34c.

Property classifications shall be made by the assessor in accordance with the provisions of MCL 211.34c which defines each classification. There are 6 classifications of real property and 5 classifications of personal property. The State Tax Commission recommends that Assessors and Boards of Review carefully read the definitions of each classification found in MCL 211.34c when determining the classification of individual properties.

Further, Assessors and Boards of Review shall NOT classify vacant property as residential if it does not fit within the residential real property classification found in MCL 211.34c(2)(e) regardless of the effect this has on the property's "homestead" exemption.

Assessors and Boards of Review shall NOT classify property as agricultural if it does not fit within the agricultural real property classification found in MCL 211.34c(2)(a) regardless of the effect this has on a property's "qualified agricultural property" exemption.

The State Tax Commission requests that any assessor or equalization director who becomes aware of this practice of deliberately misclassifying properties immediately report this fact to the State Tax Commission.

An assessor who disagrees with classifications made by the Board of Review is authorized by MCL 211.34c(6) to appeal those classifications to the State Tax Commission within 30 days after adjournment of the Board of Review.

Property Involving More Than 1 Use

Subsection 5 of MCL 3211.34c states that "if the total usage of a parcel includes more than 1 classification, the assessor shall determine the classification which most significantly influences the total valuation of the parcel." Please note that this decision is made on the basis of the percent of the total value of each use, not on the percent of the acreage devoted to each use. For example, a shopping center located on ten acres of an 80 acre parcel may well have more value than the remaining 70 acres. If so, the 80 acres would be classified commercial.

Zoning

While the zoning of a particular property may be an influencing factor when the assessor classifies a property, the zoning does not indicate the classification. For example, sometimes property is zoned for a particular use even though there is no demand for that use in the real estate market place. In this situation, the zoning has only a small or no influence on the selection of the proper classification for assessment purposes.

A property owner may appeal the classification of a property to the March Board of Review.

MCL 211.34c provides that an owner or assessor who is not satisfied with the decision of the March Board of Review regarding a property's classification may file a petition with the State Tax Commission within 30 days after adjournment of the Board of Review. The law provides that the determination by the State Tax Commission is final and cannot be appealed.

A PERSON WHO WISHES TO ALSO APPEAL THE ASSESSED VALUE OR THE TENTATIVE TAXABLE VALUE OF A PROPERTY MUST PROTEST THOSE VALUES SEPARATELY FROM THE CLASSIFICATION APPEAL. A CLASSIFICATION APPEAL DOES NOT ADDRESS THE VALUE OR CHANGE THE EQUALIZATION FACTOR FOR A PROPERTY IN THE FIRST YEAR OF A CLASS CHANGE. WHILE CLASSIFICATION APPEALS MAY BE APPEALED TO THE STATE TAX COMMISSION, APPEALS OF THE ASSESSED VALUE AND/OR TENTATIVE TAXABLE VALUE ARE APPEALED TO THE MICHIGAN TAX TRIBUNAL.

The July and December Boards of Review are not authorized to change a property's classification unless an incorrect classification was caused by a clerical error or a mutual mistake of fact.