STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5901

May 14, 1981

REMEDIES:

Recovery of overpayment on final tax levy

TAXATION:

Recovery of taxes

In the absence of judicial review sought by a local unit as to the county or state equalization of property for a particular year within the local unit, a taxpayer receiving a credit against the taxes arising from state equalization for a different year may not also recover a credit to the taxes paid for a prior year in which no judicial review was sought.

Honorable Doug Ross

State Senator

The Capitol

Lansing, Michigan

You have requested my opinion on a question which may be paraphrased as follows:

Specifically, your question is directed to the following hypothetical situation: A local unit of government appeals the determination of county equalization performed by the county board of commissioners in April of 1980 to the Michigan Tax Tribunal in accordance with the provisions of 1893 PA 206, Sec. 34; MCLA 211.34; MSA 7.52. The local unit's allegation that it has been discriminated against in the equalization process, in that the determination is unfair, unjust, inequitable or discriminatory, was confirmed by the finding of the Michigan Tax Tribunal. The Michigan Tax Tribunal made additions to or subtractions from assessed valuations of the local units within the county as it considers proper. As a result, for the year 1980 the complaining local unit received a reduction in its equalized valuation.

As described in OAG, 1979-1980, No 5700, p 753 (May 2, 1980), and OAG, 1979-1980, No 5657, p 953 (September 3, 1980), there is a flow-through of the reduction and increases in equalized valuation of the local units of government within the county to the taxpayers in the respective local units of government. If they have paid a 'tentative levy' in accordance with 1893 PA 206, Sec. 39; MCLA 211.39; MSA 7.80(1), the taxpayers in the complaining local unit will receive a credit upon the next tax roll and corresponding tax bill, whereas taxpayers in other local units of the county will be subject to an additional 'final levy' for the amount of taxes which arise from the increases in equalized value by the redistribution of equalized value ordered by the Michigan Tax Tribunal.

Your question implies that the complaining local unit which successfully challenged the 1980 county equalization would have been equally successful in challenging the 1979 county equalization. However, the local unit did not appeal the 1979 determination of equalization by the county board of commissioners. You, therefore, ask whether property owners who have benefited from the local unit's successful challenge of the 1980 county equalization may also receive an adjustment in their 1979 taxes. The 1979 equalization by the county board of commissioners became final because it was not appealed.

The assessment and equalization of property taxes is a yearly process, 1893 PA 206, Sec. 10 and Sec. 34; MCLA 211.10; MCLA 211.34; MSA 7.10, MSA 7.52; 1911 PA 44, Sec. 2; MCLA 209.2; MSA 7.602. The major steps in this process include assessment by the local assessor, county equalization and state equalization. Each of the steps in this process may be appealed by the following: (1) by the aggrieved taxpayer as to the individual property tax assessment; (2) by the city, township or local board of education as to county equalization; and (3) by the county as to the determination of state equalization.

An individual taxpayer, if he is aggrieved by his or her assessment, may, in accordance with 1893 PA 206, Sec. 30; MCLA 211.30; MSA 7.30, appeal the assessment to the local board of review. If the individual taxpayer is not satisfied with the determination of the local board of review, an appeal may be taken, pursuant to the Tax Tribunal Act, 1973 PA 186; MCLA 205.701 et seq; MSA 7.650(1) et seq, to the Michigan Tax Tribunal. 1973 PA 186, Sec. 35, supra; MCLA 205.735; MSA 7.650(35), provides that a protest to the local board of review is a prerequisite to appealing to the Michigan Tax Tribunal. Absent an appeal, the individual assessment is final and is deemed to be correct.

The next step in the process is the determination of county equalization. This function is performed by the county board of commissioners at its April meeting and results in the total value of the various units within a particular county being adjusted so that each unit is assessed at the same percentage of true cash value. 1893 PA 206, Sec. 34, supra.

With respect to county equalization, local units of government may appeal that determination to the Michigan Tax Tribunal, 1973 PA 186, Sec. 31; MCLA 205.731; MSA 7.650(31), and 1893 PA 206, Sec. 34, supra. Individual taxpayers may not appeal county equalization, 1893 PA 206, Sec. 34(4); MCLA 211.34(40); MSA 7.52(4). Again, absent an appeal by a local unit, county equalization is final and is deemed to be correct.

The third step in the process is state equalization conducted in accordance with 1911 PA 44; MCLA 209.1 et seq; MSA 7.601 et seq. On the second and fourth Monday in May it is performed by the State Tax Commission into which the Executive Organization Act of 1965 ⁽¹⁾ merged the former state board of equalization by a Type III transfer. The total value of each county in Michigan is examined and adjusted so that each county is assessed at the same percentage of true cash value. Again, absent judicial review sought by an aggrieved county, state equalization is final and deemed to be correct. Const 1963, art 6, Sec. 28. See also, Emmet County v State Tax Commission, supra.

By way of summary, assessment of property and its equalization at the county and state level may be appealed, either by the individual taxpayer (assessment), or the affected unit of government (equalization). Absent such an appeal, the assessment, county equalization and state equalization are final and deemed to be correct. Therefore, in answer to your question, it is my opinion that an individual taxpayer may not recover any portion of taxes paid for the 1979 calendar year based upon an equalization decision made by the Michigan Tax Tribunal for the 1980 calendar year.

Frank J. Kelley