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A Quagmire of Special Act Taxes


Our client is a delightful City of 8,000 residents. It is the County Seat and home to a distinguished liberal arts college. Over the years, the City Council took advantage of a myriad of Special Act tax opportunities to spur economic development in the community. Their long-tenured Treasurer retired, and a replacement lasted only a short period of time. The current Treasurer was appointed, and soon realized that there were no standard operating procedures in Treasury. Working through his various duties, the Treasurer attended trainings and documented procedures for each duty.

Pain Point

At the close of his first tax roll, the Treasurer realized the complexity of the Special Act tax situation he had inherited. The relatively small community had adopted exemptions for:

· Industrial Facilities Tax (IFT)

o IFT New Facility Personal Property sited on Industrial Class Land

o IFT New Facility Real Property

o IFT Replacement Facility Property

· Obsolete Property Rehabilitation Act Tax (OPRA)

o Frozen Building Values Pre‐exemption

o Improvement Building Values Post‐exemption

· Eligible Tax Reverted Property Specific Tax (ETRPT, or Land Bank)

· Commercial Redevelopment Act Tax (CRA)

o Frozen Building Values Pre‐exemption

o Improvement Building Values Post‐exemption

· Neighborhood Enterprise Zone (NEZ)

There were no internal documents that explained how these situations were to be handled, and none of the Property Tax training he attended had even mentioned Special Act taxes. Reporting to the State and other authorities is mandatory. City officials turned to WHG for a solution.

The WoodHill Group Solution

Using access to data in the City’s tax and assessing software, documentation provided by the City, and various resources within Michigan Treasury, WHG completed State of Michigan Forms 170‐IFT, 170‐OPRA, 170‐CRA, and the ETRPT (Land Bank) Disbursement Forms for the current year. Additionally, WHG created written instructions for each form using that data. In the following year, WHG assisted with the completion of required reporting using the written instructions as a guide.

Resulting Benefit

During WHG’s research, it was discovered that prior withholdings had been done improperly. The Treasurer was able to rectify those prior disbursements. Additionally, the Treasurer is now well versed in each of his Special Act tax situations and can perform the necessary withholding and reporting requirements.

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