Ray Township, Michigan – In a recent decision, the Michigan Court of Appeals sided with Ray Township in a property tax dispute, upholding the Michigan Tax Tribunal’s dismissal of Bluewater Natural Gas Holding, LLC’s appeal. The court found that Bluewater failed to file its petition within the required timeframe, thus forfeiting its right to have the case heard. The core of the dispute revolved around a data entry error that led to an undervaluation of Bluewater’s personal property.
The Data Entry Error and the Board of Review’s Action
The case began in 2022 when Bluewater submitted a filing to the Ray Township assessor’s office, calculating the assessed value of its personal property at nearly $18.8 million. However, due to a data entry error, the Township identified the assessed value as just over $5.7 million. This significant error resulted in Bluewater paying substantially less in taxes than it should have for that year.
Upon discovering the mistake, the Township assessor brought the issue before the Board of Review (BOR) for correction. The BOR approved the correction of the error on July 18, 2023. On the same day, the BOR issued a “Change Notice” to Bluewater, explaining that it had adjusted the assessed and taxable values of the property for 2022, citing a “measurement/calculation error” under Michigan law.
The Change Notice clearly stated that Bluewater could appeal the BOR’s decision to the Michigan Tax Tribunal within 35 days. It also provided information on how to file a petition with the tribunal, including a link to the tribunal’s website. An affidavit, certified by three board members, accompanied the Change Notice, further identifying the reason for the changes as a “Qualified Error.”
The Underpayment Notice and the Tax Tribunal Petition
Several months later, in late October 2023, the Macomb County Treasurer’s Office notified Bluewater of the amount of delinquent taxes owed due to the BOR’s increase in the property’s taxable value. This “Underpayment Notice” also included a deadline to pay the taxes without penalty.
Bluewater paid the delinquent taxes in early November 2023. Later that month, it filed a petition with the Tax Tribunal, challenging the BOR’s modification of the 2022 assessment. The Township argued the Tax Tribunal lacked jurisdiction because the petition was filed too late. Bluewater then attempted to amend its petition to address the timeliness issue and add a due process claim.
The Tax Tribunal granted Bluewater’s motion to amend but ultimately dismissed the petition, agreeing with the Township that the filing was untimely. The tribunal determined that the Change Notice, not the Underpayment Notice, triggered the 35-day deadline for filing an appeal.
The Court of Appeals Decision: Jurisdiction and Timeliness
Bluewater appealed the Tax Tribunal’s decision to the Michigan Court of Appeals. The central issue before the court was whether the Tax Tribunal had correctly dismissed the petition due to a lack of jurisdiction. The court’s review was limited to determining whether the Tax Tribunal committed an error of law in interpreting and applying the statutes governing its jurisdiction.
The Court of Appeals affirmed the Tax Tribunal’s decision, concluding that Bluewater had failed to file its petition within the required 35-day timeframe. The court emphasized that the “final decision” that Bluewater was challenging was the BOR’s July 18, 2023, approval of the qualified error. The court cited Michigan law, specifically MCL 205.735a(6), which states that the Tax Tribunal’s jurisdiction is invoked by filing a written petition within 35 days after the final decision.
The court reasoned that Bluewater’s substantive claims and requested relief related to whether the assessor’s undervaluation constituted a qualified error, not the accuracy of the County’s calculation of the resulting tax underpayment. Therefore, the court found that Bluewater needed to file its petition by August 22, 2023 (35 days after the BOR’s July meeting) to meet the deadline. Because Bluewater filed its petition in late November, the court found it was untimely.
The court rejected Bluewater’s argument that the Underpayment Notice triggered the filing deadline. The court found that the language of the relevant statutes, MCL 205.735a(6) and MCL 211.53b(1), did not support this interpretation. The court emphasized that the statutes clearly distinguish between challenging the valuation of the property (which was the subject of the BOR’s decision) and contesting the calculation of the resulting tax bill.
Due Process Considerations
Bluewater also argued that the Tax Tribunal’s dismissal violated its due process rights. It claimed that it did not receive sufficient notice to comply with constitutional due process safeguards. The Court of Appeals rejected this argument as well.
The court noted that Bluewater had received the Change Notice and the accompanying affidavit, which clearly informed the company of the BOR’s decision, the basis for the adjustment (the qualified error), and its right to appeal. The Change Notice also provided information on how to appeal to the Tax Tribunal. The court found that this notice, along with the opportunity for Bluewater to have its case heard by the tribunal, satisfied due process requirements. The court found that Bluewater had notice of the BOR’s qualified-error approval, its effect on the assessed and taxable values, and the mechanism and deadline to appeal it.
The court further stated that Bluewater’s claim was based on an erroneous interpretation of the law. The court concluded that since Bluewater had notice of the BOR action, the resulting change to their property valuation, and the opportunity to appeal, the dismissal of their case was not a violation of due process.
The Ruling’s Implications
The Court of Appeals’ decision reinforces the importance of adhering to statutory deadlines when appealing property tax assessments. It also clarifies the distinction between the initial decision regarding property valuation and the subsequent calculation of tax obligations. The ruling underscores that the clock for appealing a decision by a board of review starts ticking from the date of that decision, not the date the taxpayer receives notice of the resulting tax bill.