STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 5700

May 2, 1980

DEEDS AND CONVEYANCES:

Proration of taxes

REAL ESTATE:

Proration of taxes on conveyance

REMEDIES:

Recovery of overpayment on tentative tax levy

TAXATION:

Recovery of excess of tax liability

A taxpayer who paid ad valorem property taxes based upon a tentative levy and who no longer owns the property may not recover from the governmental unit making the tentative levy any excess taxes paid where the Tax Tribunal determines that the equalized valuation on the property was excessive.

Unless the taxpayer had an agreement with his purchaser which would entitle him to recover such excess tax paid based upon the tentative levy, any credit due inures to the benefit of the current owner of the property.

Honorable Mark Clodfelter

State Representative

The Capitol

Lansing, Michigan 48909

Dear Representative Clodfelter:

You have requested my opinion on the following questions:

1893 PA 206, Sec. 39a, MCLA 211.39a; MSA 7.80(1) provides, in pertinent part, as follows:

cause the county equalized value of Genesee County for 1975 was appealed to the Michigan Tax Tribunal, the local taxing units in Genesee County billed the owners of taxable property with a 'tentative levy' in accordance with 1893 PA 206, Sec. 39a, supra. When the Michigan Tax Tribunal finally determined the county equalized values of units within Genesee County, the tax liability of property in the City of Flint was thereby decreased. Thereafter, on the 1979 tax bills, a credit was given for a portion of the taxes collected pursuant to the 'tentative levy', representing the amount in excess of the tax liability pursuant to the 'final levy' as authorized by 1893 PA 206, Sec. 39a(4), supra.

The Michigan Supreme Court, in the case of City of Grand Rapids v Iosco Land Co, 273 Mich 613; 263 NW 753 (1935), had occasion to review a situation similar to the one presented here. In City of Grand Rapids, supra, an assessment was levied against real property that was benefited by the widening of a state trunk line highway. This assessment embraced a parcel of property then owned by the trustees of the estate of Charles F. Young, deceased. The trustees paid the entire amount of the assessment and at a later time conveyed the property to the Iosco Land Company. Subsequent to the payment of the assessment and the conveyance of the land to the Iosco Land Company, the legislature enacted 1933 PA 107, which provided that certain sums should be used by the city for the payment or refunding to the taxpayer of all or any portion of the assessment for the cost of widening a state trunk line highway. The City of Grand Rapids filed a bill of interpleader to determine whether to make payment to the trustees of the Young estate or the Iosco Land Company, both of which were claimants.

The Court ruled that 1933 PA 107 required that payment be made to the taxpayer which had made payment, not to the taxpayer who presently owned the property. This construction was based upon the plain meaning found in 1933 PA 107 that the refund should be made to the taxpayer that paid the tax.

However, in the present instance, there is no statute that requires a refund to be paid to the taxpayer who paid the taxes based on a tentative levy. On the contrary, 1893 PA 206, Sec. 39a(4) supra, provides that the credit shall be applied 'upon the property' in question. There is no statutory reference that the credit shall inure to the taxpayer who paid the taxes in question or provide any remedy for its recovery by the taxpayer of the tentative levy against any governmental unit making the excessive tentative levy.

It is, therefore, my opinion that where the taxpayer no longer owns the property assessed for taxes, the taxpayer paying ad valorem property taxes based upon a tentative levy may not recover the excess taxes from any governmental unit making the excessive tentative levy.

Turning to your second question, 1893 PA 206, Sec. 2, MCLA 211.2; MSA 7.2, provides, in pertinent part, as follows:

Unless a previous owner executed an agreement with a purchaser, as to who was to be responsible for the final tax levy, or who was to receive the excess of the tax liability pursuant to the final levy, such excess of the tax liability would inure to the present owner. Absent such an agreement, the taxes would be prorated for the year of sale only--not for prior years.

It is, therefore, my opinion, in answer to your second question, that in the absence of an agreement between the taxpayer-seller and the purchaser to require the excess of the tax liability pursuant to the final levy paid to the taxpayer, the taxpayer has no remedy against the purchaser.

Frank J. Kelley