Andrew P Campbell v. Department of Treasury ( 2022 )

Michigan Supreme Court
Lansing, Michigan
Syllabus
Chief Justice: Justices:
Bridget M. McCormack Brian K. Zahra
David F. Viviano
Richard H. Bernstein
Elizabeth T. Clement
Megan K. Cavanagh
Elizabeth M. Welch
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions:
prepared by the Reporter of Decisions for the convenience of the reader. Kathryn L. Loomis
CAMPBELL v DEPARTMENT OF TREASURY
Docket No. 161254. Argued November 9, 2021 (Calendar No. 1). Decided June 9, 2022.
Andrew P. Campbell filed a petition in the Michigan Tax Tribunal, challenging the
Department of Treasury’s denial of his claim to a principal residence exemption (PRE) for the
2017 tax year. Petitioner had claimed and received the exemption for many years. In late 2016,
he purchased property in Arizona. Without petitioner’s knowledge, Arizona automatically gave
him a credit on his tax bill after he purchased the property, treating the Arizona property as his
primary residence. Petitioner claimed a PRE for his Michigan property when he filed his 2017
taxes. Respondent denied the exemption because petitioner had received a substantially similar
tax exemption, deduction, or credit for the 2017 tax year from Arizona. When petitioner
discovered that Arizona considered his Arizona property his primary residence, petitioner had
Arizona change the classification. Nevertheless, respondent refused to grant petitioner a PRE for
his Michigan property for the 2017 tax year. Petitioner appealed the denial, and respondent
affirmed the denial following an informal conference. Petitioner thereafter filed his petition in the
tribunal. The tribunal concluded that petitioner’s property did not qualify for an exemption under
the PRE statute, MCL 211.7cc, because, even though petitioner did not apply for the Arizona
primary-residence classification, under Subsection (3)(a) of the PRE statute, he had still “claimed”
a substantially similar benefit to the PRE in another state for the 2017 tax year, regardless of the
amount of the benefit or petitioner’s subsequent rescission of the Arizona classification. However,
the tribunal determined that under Subsection (4) of the PRE statute, the PRE for the property
continued until December 31, 2017, and that the property, therefore, had a 100% PRE for the 2017
tax year. Respondent moved for reconsideration, and the tribunal denied the motion. Respondent
appealed. In a published opinion, the Court of Appeals, BOONSTRA, P.J., and TUKEL and LETICA,
JJ., affirmed the tribunal’s judgment. 331 Mich App 312 (2020). The Court agreed with the
tribunal that the no-longer-valid exemption remained in effect through December 31 of the 2017
tax year and that petitioner was entitled to 100% of the PRE for that year. It reasoned that the
result was required by the Legislature’s public-policy choice in the statutes at issue, including
Subsection (4), which creates a uniform taxation scheme that promotes ease of administration by
providing a uniform formula for determining the date on which an exemption that has become
invalid ceases to apply. The Supreme Court granted respondent’s application for leave to appeal.
506 Mich 964 (2020).
In a unanimous opinion by Justice WELCH, the Supreme Court held:
Under MCL 211.7cc(3)(a), petitioner was not entitled to a PRE in 2017 because he had
claimed in that year a substantially similar exemption, deduction, or credit on property he owned
in Arizona. Subsection (4) was not applicable to this case because petitioner’s PRE was denied
under MCL 211.7cc(3)(a), and Subsection (4) therefore did not entitle petitioner to the benefit of
a continuing exemption through the end of the calendar year. The Court of Appeals judgment was
reversed because it erred by relying on Subsection (4) to conclude that petitioner’s denied PRE
was valid through the end of the 2017 tax year.
1. Under MCL 211.1, all property, real and personal, within Michigan’s jurisdiction is
subject to taxation unless expressly exempted. MCL 211.7cc(1) provides that a principal residence
is exempt from the tax levied by a local school district for school operating purposes if the owner
of that principal residence claims an exemption as provided in the PRE statute. To obtain the PRE,
MCL 211.7cc(2) states that the property owner must file an affidavit with the local tax collecting
unit on a form prescribed by the treasury department attesting (1) that the property is owned and
occupied as a principal residence by that owner of the property on the date the affidavit is signed
and (2) that the owner has not claimed a substantially similar exemption, deduction, or credit on
property in another state.
2. MCL 211.7cc(3) prescribes disqualifying factors that preclude eligibility for the PRE
even if a person owns and occupies a property as a principal residence. In Stege v Dep’t of
Treasury, 252 Mich App 183 (2002), the Court of Appeals held that the PRE statute did not
prohibit owners from simultaneously claiming a PRE in this state at the same time the owner
claimed a similar tax benefit for a residence in another state. The following year, the Legislature
amended the PRE statute to address the Stege opinion. Relevant here, Subsection (3)(a) now
provides that a person is not entitled to a PRE in any calendar year in which that person has claimed
a substantially similar exemption, deduction, or credit, regardless of amount, on property in
another state. A claim for a substantially similar exemption, deduction, or credit in another state
occurs at the time of the filing or granting of a substantially similar exemption, deduction, or credit
in another state. If the assessor of the local tax collecting unit, the department of treasury, or the
county denies an existing claim for exemption under the PRE statute, an owner of the property
subject to that denial cannot rescind a substantially similar exemption, deduction, or credit claimed
in another state in order to qualify for the exemption under the PRE statute for any of the years
denied.
3. MCL 211.7cc(4) provides, in part, that upon receipt of an affidavit filed under
Subsection (2) and unless the claim is denied under the PRE statute, the assessor shall exempt the
property from the collection of the tax levied by a local school district for school operating
purposes until December 31 of the year in which the owner is no longer entitled to an exemption
as provided in Subsection (3). Before the Legislature’s amendment of the PRE statute, MCL
211.7cc(4) had allowed only for denial of a claim under Subsection (6); to conform with the 2003
change in Subsection (3), the Legislature broadened Subsection (4) to make it generally applicable
to separate bases for PRE denials under the PRE statute. Overall, legislative amendments in 2003
(to address the Court of Appeals’ decision in Stege) and 2017 (clarifying that a property owner is
not entitled to a PRE in any calendar year in which the owner claims a substantially similar tax
benefit in another state—regardless of whether the out-of-state benefit is rescinded) reflect a clear
legislative intent to preclude property owners from obtaining the benefit of a PRE and a similar
out-of-state tax benefit in the same year. Because Subsection (4) does not apply when an owner’s
PRE is denied, the subsection does not allow a property owner the benefit of a continuing
exemption through the end of the calendar year in which a PRE claim is denied.
4. Under MCL 211.7cc(8), the treasury department determines whether the property is the
principal residence of the owner claiming the exemption—i.e., the department has authority to
independently review the validity of PRE claims and to deny a claim for exemption if the claimant
is not entitled to that exemption. In this case, the treasury department reviewed and denied
petitioner’s 2017 PRE claim because, as prescribed in Subsection (3), he had received a
substantially similar exemption, deduction, or credit on his Arizona property in that same calendar
year. Contrary to the Court of Appeals’ conclusion, because the PRE was denied, MCL 211.7cc(4)
did not apply to extend the no-longer-valid exemption through December 31 of the 2017 tax year.
Court of Appeals judgment reversed; treasury department decision and order of
determination reinstated.
Justice VIVIANO, joined by Justices ZAHRA and CLEMENT, concurring in full with the
majority, wrote separately to further explain why petitioner was not entitled under Subsection (4)
to a PRE through the end of the 2017 tax year. To fully resolve the issue before the Court, it was
critical to understand the Subsection (4) language “or the owner is no longer entitled to an
exemption as provided in Subsection (3)” because the Court of Appeals relied on that language to
conclude, incorrectly, that petitioner maintained the PRE through the end of 2017. In response to
Stege, the Legislature amended Subsection (3) to provide that a person is not entitled to a PRE
when that person has claimed a substantially similar exemption, deduction, or credit on property
in another state that is not rescinded. Before amendments of the statute beginning in 2003,
Subsection (4) provided owners a statutory incentive to voluntarily rescind their PREs; if an owner
rescinded his or her PRE, Subsection (4) applied and the property owner would enjoy the PRE
through the end of the year in which the PRE was rescinded. The Legislature maintained the pre-
2003 incentive structure when it later amended Subsection (4). For that reason, when a claim is
denied under Subsection (3), Subsection (4) does not apply. Because petitioner did not voluntarily
rescind his PRE in 2017 but, rather, the treasury department denied his claim, Subsection (4) did
not apply and he was not entitled to retain the exemption until the end of the 2017 tax year.
Michigan Supreme Court
Lansing, Michigan
OPINION
Chief Justice: Justices:
Bridget M. McCormack Brian K. Zahra
David F. Viviano
Richard H. Bernstein
Elizabeth T. Clement
Megan K. Cavanagh
Elizabeth M. Welch
FILED June 9, 2022
STATE OF MICHIGAN
SUPREME COURT
ANDREW P. CAMPBELL,
Petitioner-Appellee,
v No. 161254
DEPARTMENT OF TREASURY,
Respondent-Appellant.
BEFORE THE ENTIRE BENCH
WELCH, J.
In this property tax dispute, we consider whether a property owner is entitled to
claim a principal residence exemption (PRE) under Michigan tax law when the owner
received a similar tax benefit for a home in another state. We conclude that the property
owner is not entitled to the PRE. Specifically, under MCL 211.7cc(3)(a), a property owner
“is not entitled to [the PRE] in any calendar year in which . . . [t]hat person has claimed a
substantially similar exemption, deduction, or credit, regardless of amount, on property in
another state.” MCL 211.7cc(3)(a) (paragraph structure omitted). Accordingly, we reverse
the judgment of the Court of Appeals and reinstate the Department of Treasury’s October
2, 2018 decision and order of determination denying petitioner’s PRE for the 2017 tax year.
I. FACTS AND PROCEDURAL HISTORY
Petitioner, Andrew P. Campbell, is a lifelong Michigan resident. For many years,
petitioner claimed and enjoyed a PRE on his Michigan residence. In late 2016, petitioner
purchased a second home in Surprise, Arizona. Petitioner indeed received a surprise the
following year: respondent, the Michigan Department of Treasury (Treasury), reviewed
and denied petitioner’s PRE claim for his Michigan property for the 2017 tax year. The
denial notice stated the following:
The parcel did not contain a dwelling owned and occupied by a person(s) as
his or her principal residence. A person is not entitled to a PRE if the
property is not occupied by the owner as his or her principal residence as
defined by MCL 211.7dd and/or if any of the conditions detailed in
Subsection (3) of MCL 211.7cc occur (refer to the back of this letter for the
applicable statutory language). [Emphasis omitted.]
Petitioner appealed Treasury’s determination to the Michigan Tax Tribunal’s Small
Claims Division. As part of his appeal, petitioner attached numerous documents in an
attempt to demonstrate his Michigan residency, including his driver’s license, insurance,
vehicle registrations, voter registration, library card, credit card and banking statements,
tax records, and a jury summons. Treasury’s position was that it was not questioning
whether petitioner actually maintained his Michigan home as his principal residence.
Rather, Treasury determined that petitioner was not entitled to the PRE for the 2017 tax
year because he had claimed a substantially similar exemption, deduction, or credit in
Arizona that same year.
2
At the Tax Tribunal hearing, petitioner admitted that he had received, unknowingly
and unintentionally, a substantially similar exemption, deduction, or credit on his Arizona
tax bill because, at least according to the state of Arizona, the Arizona property was his
primary residence (and thus eligible for a reduction on property taxes otherwise owed).
When petitioner became aware that the effect of this Arizona “primary residence” status
would eliminate his ability to claim the PRE on his Michigan property taxes, he promptly
contacted the Maricopa County Assessor’s Office and had the classification corrected on a
prospective basis. By all appearances, this seems to have been an honest mistake.
However, Treasury took the position that under Michigan law, it makes no difference
whether the substantially similar exemption, deduction, or credit is deliberately claimed or
later rescinded.
The Tax Tribunal agreed with Treasury that petitioner was not entitled to the PRE
for the 2017 tax year because he had claimed a substantially similar tax benefit in Arizona
and that this determination stood without regard to the amount of the benefit offered by
Arizona or petitioner’s subsequent rescission of the Arizona primary residence
classification. Despite upholding Treasury’s determination under MCL 211.7cc(3)(a), the
Tax Tribunal then held, with minimal analysis, that petitioner’s Michigan PRE continued
until the end of that tax year—i.e., December 31, 2017—under a different subsection, MCL
211.7cc(4). The result of this decision was that petitioner was set to receive both the
Michigan PRE and Arizona’s substantially similar tax benefit for the 2017 tax year.
Treasury appealed.
Our Court of Appeals affirmed in a published opinion, holding that “the no-longer-
valid exemption remained in effect through December 31 of the 2017 tax year” under MCL
3
211.7cc(4) and that petitioner “is entitled to 100% of the PRE for that year.” Campbell v
Dep’t of Treasury, 331 Mich App 312, 327; 952 NW2d 568 (2020). It reasoned that this
was the necessary result of “the public-policy choices made by the Legislature in the
statutes at issue.” Id. at 327 n 3. In particular, the Court understood Subsection (4) as
“creating a uniform taxation scheme that promotes ease of administration” because it
“provides a uniform formula for determining the date on which an exemption that has
become invalid ceases to apply.” Id. at 324. We granted leave to consider whether our
Court of Appeals erred by interpreting MCL 211.7cc(4) as allowing petitioner’s PRE to
continue through December 31 of the calendar year in which he was not entitled to the
exemption. Campbell v Dep’t of Treasury, 506 Mich 964 (2020). 1
II. STANDARD OF REVIEW
Our review of Michigan Tax Tribunal decisions is limited. Mt Pleasant v State Tax
Comm, 477 Mich 50, 53; 729 NW2d 833 (2007). “In the absence of fraud, error of law or
the adoption of wrong principles, no appeal may be taken to any court from any final
agency provided for the administration of property tax laws from any decision relating to
valuation or allocation.” Const 1963, art 6, § 28. We review de novo questions of statutory
interpretation. Mt Pleasant, 477 Mich at 53.
1
Petitioner has not participated in any appellate proceedings. The Real Property Law
Section of the State Bar of Michigan submitted an amicus curiae brief advocating for an
affirmance of the Court of Appeals decision.
4
III. ANALYSIS
A. INTERPRETATIVE STANDARDS
Under the General Property Tax Act (GPTA), MCL 211.1 et seq., “all property, real
and personal, within the jurisdiction of this state, not expressly exempted, shall be subject
to taxation.” MCL 211.1 (emphasis added). We understand and give effect to the
Legislature’s intent as expressed in its words and phrases according to their plain meaning.
Bisio v Village of Clarkston, 506 Mich 37, 44; 954 NW2d 95 (2020). Although the Tax
Tribunal’s interpretation of a tax statute is entitled to “ ‘respectful consideration,’ ” we will
enforce an unambiguous statute as written. SBC Health Midwest, Inc v Kentwood, 500
Mich 65, 71; 894 NW2d 535 (2017) (citation omitted).
B. THE MICHIGAN PRINCIPAL RESIDENCE EXEMPTION
Because taxation is the rule and exemption from taxation the exception, the burden
is on the claimant to establish the right to a tax exemption. Detroit v Detroit Commercial
College, 322 Mich 142, 149; 33 NW2d 737 (1948); MCL 211.1. The PRE is governed by
MCL 211.7cc, which details how a local tax collecting unit, when the exemption is properly
claimed, must exempt a qualifying principal residence from the collection of the tax levied
by local school districts for school operating purposes. Subsection (1) provides an express
exemption for a principal residence “if an owner of that principal residence claims an
exemption as provided in [MCL 211.7cc].” 2 MCL 211.7cc(1). Subsection (2) specifies
2
“Principal residence” is a defined term. In relevant part, it “means the 1 place where an
owner of the property has his or her true, fixed, and permanent home to which, whenever
absent, he or she intends to return and that shall continue as a principal residence until
another principal residence is established.” MCL 211.7dd(c). In this case, the parties do
not dispute that petitioner’s Michigan home might satisfy the requirements to qualify as
his principal residence.
5
the mechanics of how a property owner may claim the PRE by filing an affidavit with the
local tax collecting unit on a form prescribed by Treasury attesting both “that the property
is owned and occupied as a principal residence by that owner of the property on the date
that the affidavit is signed” and “that the owner has not claimed a substantially similar
exemption, deduction, or credit on property in another state.” MCL 211.7cc(2).
The remaining sections of MCL 211.7cc provide, in pertinent part:
(3) . . . For taxes levied after December 31, 2002, a person is not
entitled to an exemption under this section in any calendar year in which any
of the following conditions occur:
(a) That person has claimed a substantially similar exemption,
deduction, or credit, regardless of amount, on property in another state.
Upon request by the department of treasury, the assessor of the local tax
collecting unit, the county treasurer or his or her designee, or the county
equalization director or his or her designee, a person who claims an
exemption under this section shall, within 30 days, file an affidavit on a form
prescribed by the department of treasury stating that the person has not
claimed a substantially similar exemption, deduction, or credit on property
in another state. A claim for a substantially similar exemption, deduction, or
credit in another state occurs at the time of the filing or granting of a
substantially similar exemption, deduction, or credit in another state. If the
assessor of the local tax collecting unit, the department of treasury, or the
county denies an existing claim for exemption under this section, an owner
of the property subject to that denial cannot rescind a substantially similar
exemption, deduction, or credit claimed in another state in order to qualify
for the exemption under this section for any of the years denied. If a person
claims an exemption under this section and a substantially similar exemption,
deduction, or credit in another state, that person is subject to a penalty of
$500.00. The penalty shall be distributed in the same manner as interest is
distributed under subsection (25).
* * *
(4) Upon receipt of an affidavit filed under subsection (2) and unless
the claim is denied under this section, the assessor shall exempt the property
from the collection of the tax levied by a local school district for school
operating purposes to the extent provided under section 1211 of the revised
6
school code, 1976 PA 451, MCL 380.1211, as provided in subsection (1)
until December 31 of the year in which the property is transferred or, except
as otherwise provided in subsections (5), (32), and (33), is no longer a
principal residence as defined in section 7dd, or the owner is no longer
entitled to an exemption as provided in subsection (3).
* * *
(8) The department of treasury shall determine if the property is the
principal residence of the owner claiming the exemption. . . . [T]he
department of treasury may review the validity of exemptions for the current
calendar year and for the 3 immediately preceding calendar years. Except as
otherwise provided in subsections (5), (32), and (33), if the department of
treasury determines that the property is not the principal residence of the
owner claiming the exemption, the department shall send a notice of that
determination to the local tax collecting unit and to the owner of the property
claiming the exemption, indicating that the claim for exemption is denied,
stating the reason for the denial, and advising the owner claiming the
exemption of the right to appeal the determination to the department of
treasury and what those rights of appeal are. . . . Upon receipt of a notice that
the department of treasury has denied a claim for exemption, the assessor
shall remove the exemption of the property and, if the tax roll is in the local
tax collecting unit’s possession, amend the tax roll to reflect the denial and
the local treasurer shall within 30 days of the date of the denial issue a
corrected tax bill for any additional taxes with interest at the rate of 1.25%
per month or fraction of a month and penalties computed from the date the
taxes were last payable without interest and penalty. If the tax roll is in the
county treasurer’s possession, the tax roll shall be amended to reflect the
denial and the county treasurer shall within 30 days of the date of the denial
prepare and submit a supplemental tax bill for any additional taxes, together
with interest at the rate of 1.25% per month or fraction of a month and
penalties computed from the date the taxes were last payable without interest
or penalty. [Emphasis added.]
The statute is clear on its face. A tax exemption for real or personal property under
the GPTA is available only when the Legislature expressly exempts that property from
taxation. MCL 211.1. That has not occurred here. Instead, the Legislature explicitly
provided that “a person is not entitled to an exemption under [MCL 211.7cc] in any
calendar year” when “[t]hat person has claimed a substantially similar exemption,
7
deduction, or credit, regardless of amount, on property in another state.” 3 MCL
211.7cc(3)(a) (emphasis added). 4 As applied to the facts of this case, petitioner was not
entitled to the PRE in the 2017 tax year exactly because he admitted that he had received
“a substantially similar exemption, deduction, or credit” on his Arizona property in that
same calendar year.
Although our Court of Appeals arrived at this same conclusion, it did not end its
analysis there. Instead, reasoning that the Legislature sought to maintain uniformity and
to simplify the administration of the PRE, that Court held that Subsection (4) applied and
worked to allow petitioner to maintain the benefit of his denied PRE through the end of the
2017 calendar year. Campbell, 331 Mich App at 324-325. We disagree.
3
As a general rule, the taxable status of real property is determined as of December 31 of
the immediately preceding year. MCL 211.2(2). However, in the context of the PRE, a
different rule applies. “Notwithstanding the tax day provided in [MCL 211.2], the status
of property as a principal residence shall be determined on the date an affidavit claiming
an exemption is filed under [MCL 211.7cc(2)].” MCL 211.7cc(1). Subsection (3)(a)
requires a review of the property owner’s tax claims in another state during the course of
the entire calendar year.
4
Our Court of Appeals recently described Subsection (3) as stating the “conditions in
which a person otherwise qualified to receive the PRE in Subsection (1) is disqualified
from doing so.” Foster v Van Buren Co, 332 Mich App 273, 281; 956 NW2d 554 (2020).
The Principal Residence Exemption Guidelines, a publication issued by Treasury, similarly
refers to Subsection (3) as listing “disqualifying factors” that preclude eligibility for the
PRE even if a person owns and occupies a property as a principal residence. Treasury,
Principal Residence Exemption Guidelines (August 2021), p 25, available at
(accessed
December 9, 2021) [https://perma.cc/HH73-RLCK]. The result is the same regardless of
whether the property owner is considered “disqualified” or simply unable to establish
entitlement to the PRE because of a failure to satisfy the express conditions imposed by
the Legislature for eligibility. Under either circumstance, the property owner is not entitled
to the PRE.
8
To understand why the Court of Appeals erred in its interpretation of Subsection
(4), it is important to recognize the changes that the Legislature has made to MCL 211.7cc
over time and in response to earlier judicial decisions interpreting this statute. See Bush v
Shabahang, 484 Mich 156, 167; 772 NW2d 272 (2009) (“[C]ourts must pay particular
attention to statutory amendments, because a change in statutory language is presumed to
reflect either a legislative change in the meaning of the statute itself or a desire to clarify
the correct interpretation of the original statute.”).
In Stege v Dep’t of Treasury, 252 Mich App 183, 193-196; 651 NW2d 164 (2002),
our Court of Appeals held that the GPTA did not prohibit property owners from
simultaneously claiming both a PRE and a similar tax benefit for a separate residence in
another state. The Legislature responded by amending MCL 211.7cc(3) to provide that
property owners are not entitled to a PRE when they have “claimed a substantially similar
exemption, deduction, or credit on property in another state that is not rescinded.” 2003
PA 105. That change necessitated a conforming change to Subsection (4). Previously,
Subsection (4) stated, “Upon receipt of an affidavit filed under subsection (2) and unless
the claim is denied under subsection (6), the assessor shall exempt the property . . . .” MCL
211.7cc(4) as amended by 2002 PA 624 (emphasis added). Because 2003 PA 105 added a
new basis for denying a PRE under Subsection (3)—i.e., claiming a substantially similar
tax exemption in another state—Subsection (4) had to be broadened to make it generally
applicable to all separate bases for PRE denials under MCL 211.7cc. Accordingly, 2003
PA 105 broadened the coverage of Subsection (4) to reflect its current form: “unless the
claim is denied under this section . . . .” MCL 211.7cc(4) as amended by 2003 PA 105(emphasis added).
9
In 2017, the Tax Tribunal issued an unpublished decision holding that property
owners whose PRE claims are denied because they claimed a substantially similar tax
benefit in another state could rescind their out-of-state tax benefit in order to qualify for
the Michigan PRE that was previously denied. See Walczak Trust v Berrien Co,
unpublished opinion of the Michigan Tax Tribunal, issued January 10, 2017 (Docket No.
16-001208), p 2. The Legislature responded to this decision by again amending MCL
211.7cc(3), this time to clarify that a property owner is not entitled to a PRE “in any
calendar year in which” that owner claims a substantially similar tax benefit in another
state—regardless of whether the out-of-state benefit is rescinded. See 2017 PA 121(emphasis added). 5 Overall, we understand these legislative amendments to reflect a clear
legislative intent to preclude property owners from obtaining the benefit of the PRE and a
similar out-of-state tax benefit in the same year. 6
As we have noted in earlier decisions, “[t]he GPTA provides a comprehensive
system for the assessment of property for ad valorem tax purposes and the collection of
those taxes. It also provides for the administration of the system.” Mich Props, LLC v
Meridian Twp, 491 Mich 518, 530; 817 NW2d 548 (2012). A PRE is not available “in any
calendar year” when a property owner “claimed a substantially similar exemption,
deduction, or credit, regardless of amount, on property in another state.” MCL
5
In enacting 2017 PA 121, the Legislature explicitly stated, “This amendatory act is
curative and intended to correct any misinterpretation of legislative intent in the final
opinion and judgment of the Michigan Tax Tribunal, MTT Docket No. 16-001208, issued
January 10, 2017.” 2017 PA 121, enacting § 2.
6
Consistently with this understanding of legislative intent, the Legislature subjects those
wrongfully claiming the PRE and a substantially similar exemption, deduction, or credit in
another state to a $500 penalty. MCL 211.7cc(3)(a).
10
211.7cc(3)(a). Contrary to the Court of Appeals, we do not interpret Subsection (4) as
allowing a property owner the continuing benefit of a denied exemption claim through the
end of the calendar year. Instead, Subsection (4) should be read consistently with its
purpose in administering our system of property taxation through the local tax collecting
unit. It directs that “unless the claim is denied under this section, the assessor shall exempt
the property” and describes other circumstances when the exemption will no longer remain
valid. MCL 211.7cc(4).
To resolve this case, we recognize that Treasury denied petitioner’s PRE pursuant
to its authority under MCL 211.7cc to independently review the validity of PRE claims and
to deny a claim for an exemption if the claimant is not entitled to that exemption. See MCL
211.7cc(8) (stating that “the department of treasury may review the validity of exemptions
for the current calendar year and for the 3 immediately preceding calendar years”);
Schubert v Dep’t of Treasury, 322 Mich App 439, 453-454; 912 NW2d 569 (2017). When
a PRE claim is denied under MCL 211.7cc, other provisions require that the assessor
“remove the exemption of the property,” that the tax roll be amended “to reflect the denial,”
and that a corrected tax bill issue “within 30 days of the date of the denial” for any
additional taxes with interest. See MCL 211.7cc(6), (8), and (11). In other words, when a
property owner’s PRE claim is denied under MCL 211.7cc, Subsection (4) imparts no
further duty or authority on the assessor to continue to exempt the property from taxation. 7
7
In light of our holding that Subsection (4) does not entitle a property owner to the benefit
of a continuing exemption through the end of a calendar year when a PRE claim is denied,
we have no occasion to address whether a property owner can obtain the benefit of a
continuing exemption through the end of a calendar year under Subsection (4) by
11
Therefore, the Court of Appeals erred when it applied Subsection (4) to conclude
otherwise.
We reverse the judgment of the Court of Appeals and reinstate the October 2, 2018
decision and order of determination of the Department of Treasury.
Elizabeth M. Welch
Bridget M. McCormack
Brian K. Zahra
David F. Viviano
Richard H. Bernstein
Elizabeth T. Clement
Megan K. Cavanagh
preemptively rescinding a Michigan PRE claim in anticipation of claiming a substantially
similar tax benefit in another state.
12
STATE OF MICHIGAN
SUPREME COURT
ANDREW P. CAMPBELL,
Petitioner-Appellee,
v No. 161254
DEPARTMENT OF TREASURY,
Respondent-Appellant.
VIVIANO, J. (concurring).
I concur with the majority but write separately because I do not believe the majority
opinion adequately explains why petitioner, Andrew P. Campbell, is not entitled to a
principal residence exemption (PRE) through the end of the 2017 tax year under Subsection
(4) of the PRE statute, MCL 211.7cc(4). In upholding petitioner’s claim, the Court of
Appeals panel believed that Subsection (4) was “at the heart of this appeal” and was “the
critical provision” in resolving this case. Campbell v Dep’t of Treasury, 331 Mich App
312, 318, 322; 952 NW2d 568 (2020). Although the majority correctly concludes that
Subsection (4) is not applicable, it does not sufficiently explain why this is so. I would
take this opportunity to explain that Subsection (4) applies when the taxpayer voluntarily
rescinds his or her PRE—not where, as here, the claim is denied by the tax authorities under
MCL 211.7cc.
The majority holds that because petitioner’s PRE was denied by respondent, the
Department of Treasury, under MCL 211.7cc(3), that subsection’s prohibition applied and
he was “not entitled to an exemption under [MCL 211.cc7] in any calendar year in which”
he “claimed a substantially similar exemption . . . in another state.” I agree that Subsection
(3) provides part of the answer. But the Court of Appeals looked to Subsection (4), which
appears to set forth a different rule:
Upon receipt of an affidavit filed under subsection (2) and unless the
claim is denied under this section, the assessor shall exempt the property
from the collection of the tax levied by a local school district for school
operating purposes to the extent provided under section 1211 of the revised
school code, 1976 PA 451, MCL 380.1211, as provided in subsection (1)
until December 31 of the year in which the property is transferred or, except
as otherwise provided in subsections (5), (32), and (33), is no longer a
principal residence as defined in section 7dd, or the owner is no longer
entitled to an exemption as provided in subsection (3).
Under its reading, the Court of Appeals concluded that this subsection applied and that it
established an end date of December 31 for petitioner’s PRE. Campbell, 331 Mich App at
322, 325-327. The majority purports to explain why Subsection (4) is inapplicable, but
offers only a dry statutory history followed by the broad conclusion that the history
“reflect[s] a clear legislative intent to preclude property owners from obtaining the benefit
of the PRE and a similar out-of-state benefit in the same year.” Clearly, one colorable
reading of Subsection (4) is that, at least in certain circumstances, the Legislature intended
to allow the taxpayer to benefit from the PRE through the end of the year in which he or
she claims a substantially similar tax exemption in another state. We must explain why
those circumstances do not exist here. To complete the analysis, a more thorough
investigation of the statutory history must be undertaken along with an examination of the
statutory text.
Before MCL 211.7cc was amended in 2003, the statute contemplated that owners
would lose their PREs only if they transferred ownership or no longer used the property as
2
a principal residence. Former Subsection (3) simply stated that a husband and wife who
filed a joint tax return were only entitled to one PRE, then known as the “homestead
exemption.” MCL 211.7cc(3), as amended by 2002 PA 624. Like the current statute,
former Subsection (5) set forth the requirement that an owner who no longer uses his or
her home as a principal residence “shall rescind the claim of exemption . . . .” MCL
211.7cc(5), as amended by 2002 PA 624. 1 And, as now, former Subsection (6) set out the
process for a local tax assessor to deny a new or existing PRE when the claimed property
was no longer the owner’s principal residence. MCL 211.7cc(6), as amended by 2002 PA
624. 2 At that time, former Subsection (4) was straightforward, stating, in relevant part, that
“unless the claim is denied under subsection (6),” the property would be exempt “until
December 31 of the year in which the property is transferred or no longer a
homestead . . . .” MCL 211.7cc(4), as amended by 2002 PA 624 (emphasis added).
The statutory framework provided owners an incentive to voluntarily rescind their
PREs. If they did so, then Subsection (4) would apply because their PRE claim would not
1
This subsection presently states:
(5) . . . [N]ot more than 90 days after exempted property is no longer
used as a principal residence by the owner claiming an exemption, that owner
shall rescind the claim of exemption by filing with the local tax collecting
unit a rescission form prescribed by the department of treasury. [MCL
211.7cc(5).]
2
This subsection now states,
(6) . . . [I]f the assessor of the local tax collecting unit believes that the
property for which an exemption is claimed is not the principal residence of
the owner claiming the exemption, the assessor may deny a new or existing
claim . . . . The assessor may deny a claim for exemption for the current year
and for the 3 immediately preceding calendar years. [MCL 211.7cc(6).]
3
be denied for the year in which the claim was rescinded. In other words, under former
Subsection (4), the property owners could enjoy the PRE through the end of the year. If
the claim was denied (under Subsection (6)), then they would not receive this benefit. See
MCL 211.7cc(5), as amended by 2002 PA 624. As now provided for in Subsection (6), if
a claim was denied under the former statute, the assessor was to remove the exemption and
assess taxes with interest for the period in which the taxes should have been paid. See
MCL 211.7cc(6) and (7), as amended by 2002 PA 624.
As the majority notes, the Court of Appeals in 2002 held that this statutory
framework allowed taxpayers to simultaneously claim a PRE in Michigan and a similar tax
benefit in another state. See Stege v Dep’t of Treasury, 252 Mich App 183, 193-196; 651
NW2d 164 (2002). In response, the Legislature amended MCL 211.7cc(3) to provide that
a person is not entitled to a PRE when that person has “claimed a substantially similar
exemption, deduction, or credit on property in another state that is not rescinded.” See
MCL 211.7cc(3)(a), as amended by 2003 PA 105. The Legislature also put MCL
211.7cc(4) into its present form, expanding the introductory clause to exclude any claim
“denied under this section[.]” See MCL 211.7cc(4), as amended by 2003 PA 105, and
MCL 211.7cc(4), as amended by 2020 PA 96. The pre-2003 incentive structure remained
in place after these amendments. Specifically, the statutory structure continues to
encourage property owners to voluntarily rescind their PREs. Thus, if a claim is denied
under Subsection (3), then Subsection (4) is inapplicable. That is, if the property owner
rescinds his or her PRE, then Subsection (4)’s operative language (“unless the claim is
denied under this section”) would not be triggered and the December 31 termination date
4
would apply to allow the property owner to retain the PRE for the remainder of the calendar
year. 3 MCL 211.7cc(4) (emphasis added).
The language in Subsection (3) that the majority relies on was added in response to
a Tax Tribunal decision in 2017. The tribunal held that a taxpayer claiming a substantially
similar exemption in another state could rescind that exemption and thereby retain his or
her entitlement to the previously denied PRE in this state. See Walczak Trust v Berrien
Co, unpublished opinion of the Michigan Tax Tribunal, issued January 10, 2017 (Docket
No. 16-001208), p 2. The Legislature thereafter amended Subsection (3) to make clear that
a person is not entitled to a PRE “in any calendar year in which” that person “claimed a
substantially similar exemption . . . in another state,” without regard to whether the other
3
Amicus curiae the Real Property Law Section of the State Bar of Michigan argues that
the language in Subsection (4)—“the claim . . . denied under this section”—refers only to
a local tax assessor’s initial assessment of a new PRE claim filed as an affidavit under
Subsection (2) and, therefore, that respondent’s denial of petitioner’s existing PRE claim
had no effect on the applicability of Subsection (4). A review of MCL 211.7cc as a whole,
however, suggests the Legislature did not intend to limit Subsection (4)’s operative clause
to only new claims. For example, MCL 211.7cc(6) refers to both “new” and “existing”
claims in describing the local tax collecting unit’s authority to deny a PRE if the assessor
believes the property is not the owner’s principal residence. Had the Legislature intended
the language “the claim . . . denied under this section” in Subsection (4) to refer only to a
“new” PRE claim, it likely would have used that phrasing. See US Fidelity & Guaranty
Co v Mich Catastrophic Claims Ass’n (On Rehearing), 484 Mich 1, 14; 795 NW2d 101
(2009) (“When the Legislature uses different words, the words are generally intended to
connote different meanings. . . . If the Legislature had intended the same meaning in both
statutory provisions, it would have used the same word.”). See also Scalia & Garner,
Reading Law: The Interpretation of Legal Texts (St. Paul: Thomson/West, 2012), p 170
(“[W]here the document has used one term in one place, and a materially different term in
another, the presumption is that the different term denotes a different idea.”).
5
exemption is rescinded. See MCL 211.7cc(3)(a), as amended by 2017 PA 121. 4 In the
same legislation, Subsection (4) was amended to add the clause at the center of the Court
of Appeals’ analysis: “or the owner is no longer entitled to an exemption as provided in
subsection (3).” MCL 211.7cc(4), as amended by 2017 PA 121, and discussed in
Campbell, 331 Mich App at 322, 325-327. This last change led the Court of Appeals here
to conclude that terminations of PREs under Subsection (3) fall within Subsection (4) and
have an end date on December 31. Campbell, 331 Mich App at 325-327.
While Subsection (4) does not apply here because the claim was denied under this
subsection by the taxing authority, it is important to give some account of the language in
Subsection (4) because the Court of Appeals relied on it. As noted, the December 31 end
date in Subsection (4) applies when taxpayers voluntarily rescind their PREs, thus giving
them the benefit of the PRE that they would not otherwise have if their claims were denied.
It is possible, as the Court of Appeals concluded, that the phrase “December 31 of the year
in which” applies to the phrase “or the owner is no longer entitled to an exemption as
provided in subsection (3).” If so, then Subsection (4) would similarly benefit owners who
voluntarily rescind their PREs when they acquire a substantially similar exemption in
another state. 5 In other words, application of the December 31 date would encourage
4
The Legislature explicitly stated that the statute was in reaction to Walczak Trust: “This
amendatory act is curative and intended to correct any misinterpretation of legislative
intent in the final opinion and judgment of the Michigan Tax Tribunal, MTT Docket No.
16-001208, issued January 10, 2017.” 2017 PA 121, enacting § 2.
5
In interpreting Subsection (4), the Court of Appeals concluded that the December 31
language in the subsection applied to the new phrase added to the end of the subsection in
2017. Campbell, 331 Mich App at 325-327. That is, the Court read the statute as
terminating the PRE on “December 31 of the year in which the property is transferred
6
owners to voluntarily rescind their PREs when their claim would otherwise be denied under
Subsection (3), just as it does for transfers and rescissions based on the home no longer
being used as a principal residence. We need not decide that question here because the
PRE was not voluntarily rescinded.
To fully resolve the question that is before the Court and explain why the Court of
Appeals erred, it is critical to explain why Subsection (4) is inapplicable. The answer is
that Subsection (4) applies only when a claim is not denied under MCL 211.7cc, and a
claim is not denied when it is voluntarily rescinded. Here, petitioner did not voluntarily
rescind his PRE; it was denied by the taxing authority. Therefore, Subsection (4) cannot
apply and the language in Subsection (3) prohibiting the taxpayer from claiming an
exemption controls.
For these reasons, I concur.
David F. Viviano
Brian K. Zahra
Elizabeth T. Clement
or . . . is no longer a principal residence . . . , or the owner is no longer entitled to an
exemption as provided in subsection (3).” MCL 211.7cc(4). While the December 31
deadline evidently applies to situations when “the property is transferred or . . . is no longer
a principal residence,” it is not immediately clear whether the December 31 deadline also
extends to situations in which “the owner is no longer entitled to an exemption as provided
in subsection (3).” Id. Of course, it is difficult to see what meaning that last phrase would
have if the December 31 end date did not apply to it. Because Subsection (4) is not
triggered when a PRE is denied, I need not resolve this in the instant case, but it is an open
question whether the December 31 end date would apply to the third situation mentioned,
where a taxpayer voluntarily rescinds a PRE because of claiming a substantially similar
credit in another state.
7