League Opposes Bill That Could Expand Charitable Property Tax Exemption

Posted on October 18, 2016 by Dene Westbrook

The Senate Finance committee met today and reported Senate Bill 960 (Brandenburg), despite testimony from the League and the mayor of the city of Dexter in opposition to the bill.  This bill was introduced at the request of non-profit organizations, claiming inconsistency between municipalities in the application of the charitable exemption standards in the current law, especially in the wake of the 2006 Wexford decision.  In opposing this bill, the League was joined by the Michigan Townships Association and the Michigan Department of Treasury in asserting that the language in the SB-960-s-1 being considered by the committee goes beyond a simple codification of the Wexford decision and expands access to the exemption to entities that are not currently eligible.  The Senate Fiscal Agency has estimated the impact on local property tax revenue from this expansion to be $27.6 million in the first year, with State Education Tax and local school operating mill revenue impacts as well.

The city of Dexter testified that the inclusion of new language in the bill providing for the “promotion of health and wellness” as an eligible charitable purpose was an over-broad expansion of the current standards, offering an invitation for potential abuse and could impact a case that the city has been successful in before the Michigan Tax Tribunal.

The bill was reported by a vote of 5-1 with one abstention and is now on the Senate floor awaiting a vote, which could be scheduled yet this week.  Please contact your State Senator TODAY and urge their opposition to this expansion and instead consider language proposed by Treasury which would scale this bill back to a strict codification of the Wexford decision and the 120 years of existing case law on this topic.

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and [email protected].

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