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Treasury publishes guidance on new poverty exemption options

Posted on February 4, 2021 by Dene Westbrook

The Michigan Department of Treasury recently published new guidance on new poverty exemption options. Under PA 253 of 2020, legislation that was completed during December’s lame duck period, local governments have been given the option to extend additional relief opportunities to taxpayers that are eligible for the existing property tax poverty exemption.

This includes allowing existing applications to remain in effect without reapplying to accommodate health concerns and to offer longer term application extensions for individuals on certain fixed incomes.  Additionally, the new language seeks to streamline the property tax relief options available under this program to a 100% exemption, 50% or 25% reductions.  Any other level of tax relief a local unit would like to provide under this section must be reviewed and approved by the State Tax Commission. In order to opt in to providing these new extensions, local units must pass an affirmative resolution by February 15th, 2021.  You can see a copy of the resolution adopted by the city of Detroit here for other communities interested in offering this relief.

The following information was provided by the State Tax Commission related to the necessary forms and materials related to this new act and for communities that seek to offer a level of relief outside the specified levels in the statute.

The State Tax Commission at their meeting on January 19, 2021 approved the following Poverty Exemption Forms:

  • Form 5737 – Application for MCL 211.7u Poverty Exemption
  • Form 5738 – Request for Approval of Percentage Reduction in Taxable Value for Poverty Exemptions Under MCL 211.7u
  • Form 5739 – Affirmation of Ownership and Occupancy to Remain Exempt by Reason of Poverty

The Commission also approved the attached Policy Regarding Requests for Percentage Reductions in Taxable Value for Poverty Exemptions.  These forms and policy include information related to Public Act 253 of 2020, changes to the poverty exemption statute (MCL 211.7u) that will impact how local units, assessors, and boards of review handle the exemption starting with the 2021 tax year.

The forms and policy are linked below and are available on the State Tax Commission’s website here.

  • 5737_01-21 Application for Poverty Exemption
  • 5739_01-21 Affirmation to Remain Poverty
  • State Tax Commission Policy Regarding Requests for Percentage Reductions in Taxable Value for Poverty Exemptions
  • 5738_01-21 Request for Percentage Reduction

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

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