Skip to main content

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."