Tuesday, May 9, 2017

Michigan Supreme Court: Personal Property Tax Exemption Applies Regardless of Nonprofit Status

On May 1, the Michigan Supreme Court ruled for-profit college Sanford-Brown College Grand Rapids was not required to pay property taxes on its personal property.  Two Michigan statutes Michigansupremecourtseal exempt property owned by charitable and educational institutions from taxation. Section 211.7n exempts real property owned by "nonprofit theater, library, educational, or scientific institutions," while section 211.9(1)(a) exempts personal property owned by "charitable, educational, and scientific institutions." Note that the word nonprofit is missing from the latter section. (It is unclear whether this omission was intentional or not.)

The Michigan Supreme Court unanimously ruled that the language in section 211.9(1)(a) was "unambiguous. This statute allows the exemption of personal property from taxes imposed on institutions that are educational in nature. Conspicuously absent from the statute is any language indicating that the tax exemption applies only to nonprofit entities." The College's obligations to pay real property taxes were unaffected by the ruling, but now the College shares the same personal property tax exemptions as any charitable or nonprofit educational institution in the State.

(h/t: @StateSupremes)

@JosephWMead

http://lawprofessors.typepad.com/nonprofit/2017/05/michigan-supreme-court-personal-property-tax-exemption-applies-regardless-of-nonprofit-status.html

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