Michigan House Bill HB4966

Michigan 2023-2024 Regular Session

• Introduced: 9/12/23
• Refer: 9/12/23
• Report Pass: 9/28/23

Caption

Taxation: specific tax; land value tax; provide for. Creates new act. TIE BAR WITH: HB 4967'23, HB 4968'23, HB 4969'23, HB 4970'23

Impact

Should the bill be enacted, it would allow qualified local governments to levy this land value tax in place of certain ad valorem taxes. This change is expected to promote better land use and development by distinguishing between the value of land and structures, potentially leading to increased property values and economic growth. Additionally, specific credits and exemptions would be established to ensure the fair application of this system, allowing local units of government to meet their fiscal obligations while supporting community needs.

Summary

House Bill 4966, known as the Land Tax Equity Act, proposes a new taxation framework aimed at enhancing equity in property taxation within certain cities and local units of government in Michigan. The bill intends to replace parts of the ad valorem property tax system with a specific tax that applies uniformly to land only. The overall goal is to encourage the development and improvement of real property while simplifying the tax obligations for local governmental units, enabling them to better provide necessary services to their communities.

Contention

While proponents argue that adopting a land value tax will facilitate equitable taxation and help address urban blight by incentivizing land development, opponents may view the alteration of the existing system as overly complex or disruptive. Concerns might also arise regarding the effectiveness of the credits and exemptions in achieving the bill’s intended equity goals, as well as how local governments will adapt to this significant change in their revenue structure. Furthermore, the requirement for local voter approval to implement the new tax ensures that communities are actively engaged in the decision-making process.