Bill Text: MI HB4173 | 2015-2016 | 98th Legislature | Engrossed
Bill Title: Taxation; state real estate transfer; refunds and exemptions of real estate transfer tax; modify. Amends secs. 3 & 6 of 1993 PA 330 (MCL 207.523 & 207.526).
Spectrum: Moderate Partisan Bill (Republican 5-1)
Status: (Passed) 2015-12-15 - Assigned Pa 217'15 With Immediate Effect [HB4173 Detail]
Download: Michigan-2015-HB4173-Engrossed.html
HB-4173, As Passed Senate, November 10, 2015
SENATE SUBSTITUTE FOR
HOUSE BILL NO. 4173
A bill to amend 1993 PA 330, entitled
"State real estate transfer tax act,"
by amending sections 3 and 6 (MCL 207.523 and 207.526), as amended
by 2008 PA 473.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3. (1) There is imposed, in addition to all other taxes,
a tax upon the following written instruments executed within this
state when the instrument is recorded:
(a) Contracts for the sale or exchange of property or any
interest in the property or any combination of sales or exchanges
or any assignment or transfer of property or any interest in the
property.
(b) Deeds or instruments of conveyance of property or any
interest in property, for consideration.
(c) Contracts for the transfer or acquisition of a controlling
interest in any entity only if the real property owned by that
entity comprises 90% or more of the fair market value of the assets
of the entity determined in accordance with generally accepted
accounting principles which shall be recorded.
(2) The person who is the seller or grantor of the property is
liable for the tax imposed under this act.
(3) The tax imposed under this act shall be paid to the county
treasurer where the real property is located not later than 15 days
after the delivery of the instrument effecting the conveyance by
the seller or grantor to the buyer or grantee or not later than 15
days after the transfer of a controlling interest in any entity
with an interest in the real property. For purposes of this
section, the date of the instrument effecting the transfer is
presumed to be the date of delivery of the instrument.
(4) After the tax is paid, if the seller or the buyer who has
paid the tax on behalf of the seller believes that the property was
eligible for an exemption under section 6 at the time of the
transfer, the seller or the buyer who has paid the tax on behalf of
the seller may request a refund from the department of treasury in
a form and manner determined by the department of treasury. The
department of treasury shall pay the refund if it determines that
the property was eligible for the exemption under section 6 at the
time of the transfer. This subsection is intended to be retroactive
and applies to a sale, exchange, assignment, or transfer beginning
4 years immediately preceding the effective date of the amendatory
act that added this subsection.
Sec. 6. The following written instruments and transfers of
property are exempt from the tax imposed by this act:
(a) A written instrument in which the value of the
consideration for the property is less than $100.00.
(b) A written instrument evidencing a contract or transfer
that is not to be performed wholly within this state only to the
extent the written instrument includes land lying outside of this
state.
(c) A written instrument that this state is prohibited from
taxing under the United States constitution or federal statutes.
(d) A written instrument given as security or an assignment or
discharge of the security interest.
(e) A written instrument evidencing a lease, including an oil
and gas lease, or a transfer of a leasehold interest.
(f) A written instrument evidencing an interest that is
assessable as personal property.
(g) A written instrument evidencing the transfer of a right
and interest for underground gas storage purposes.
(h) Any of the following written instruments:
(i) A written instrument in which the grantor is the United
States, this state, a political subdivision or municipality of this
state, or an officer of the United States or of this state, or a
political subdivision or municipality of this state, acting in his
or her official capacity.
(ii) A written instrument given in foreclosure or in lieu of
foreclosure of a loan made, guaranteed, or insured by the United
House Bill No. 4173 as amended November 10, 2015
States, this state, a political subdivision or municipality of this
state, or an officer of the United States or of this state, or a
political subdivision or municipality of this state, acting in his
or her official capacity.
(iii) A written instrument given to the United States, this
state, or 1 of their officers acting in an official capacity as
grantee, pursuant to the terms or guarantee or insurance of a loan
guaranteed or insured by the grantee.
(i) A conveyance from a <<husband or
wife or husband and wife
spouse or married couple>>
creating or disjoining a tenancy by the entireties in the grantors
or the grantor and his or her spouse.
(j) A conveyance from an individual to that individual's
child, stepchild, or adopted child.
(k) A conveyance from an individual to that individual's
grandchild, step-grandchild, or adopted grandchild.
(l) A judgment or order of a court of record making or
ordering a transfer, unless a specific monetary consideration is
specified or ordered by the court for the transfer.
(m) A written instrument used to straighten boundary lines if
no monetary consideration is given.
(n) A written instrument to confirm title already vested in a
grantee, including a quitclaim deed to correct a flaw in title.
(o) A land contract in which the legal title does not pass to
the grantee until the total consideration specified in the contract
has been paid.
(p) A conveyance that meets 1 of the following:
(i) A transfer between any corporation and its stockholders or
creditors, between any limited liability company and its members or
creditors, between any partnership and its partners or creditors,
or between a trust and its beneficiaries or creditors when the
transfer is to effectuate a dissolution of the corporation, limited
liability company, partnership, or trust and it is necessary to
transfer the title of real property from the entity to the
stockholders, members, partners, beneficiaries, or creditors.
(ii) A transfer between any limited liability company and its
members if the ownership interests in the limited liability company
are held by the same persons and in the same proportion as in the
limited liability company prior to the transfer.
(iii) A transfer between any partnership and its partners if
the ownership interests in the partnership are held by the same
persons and in the same proportion as in the partnership prior to
the transfer.
(iv) A transfer of a controlling interest in an entity with an
interest in real property if the transfer of the real property
would qualify for exemption if the transfer had been accomplished
by deed to the real property between the persons that were parties
to the transfer of the controlling interest.
(v) A transfer in connection with the reorganization of an
entity and the beneficial ownership is not changed.
(q) A written instrument evidencing the transfer of mineral
rights and interests.
(r) A written instrument creating a joint tenancy between 2 or
more persons if at least 1 of the persons already owns the
property.
(s) A transfer made pursuant to a bona fide sales agreement
made before the date the tax is imposed under sections 3 and 4, if
the sales agreement cannot be withdrawn or altered, or contains a
fixed price not subject to change or modification.
(t) A written instrument evidencing a contract or transfer of
property to a person sufficiently related to the transferor to be
considered a single employer with the transferor under section
414(b) or (c) of the internal revenue code of 1986, 26 USC 414.
(u) A written instrument conveying an interest in property for
which an exemption is claimed under section 7cc of the general
property tax act, 1893 PA 206, MCL 211.7cc, if the state equalized
valuation of that property is equal to or lesser than the state
equalized valuation on the date of purchase or on the date of
acquisition by the seller or transferor for that same interest in
property and the transaction was for a price at which a willing
buyer and a willing seller would arrive through an arms-length
negotiation. If after an exemption is claimed under this
subsection,
the sale or transfer of property is found by the
treasurer
to be at a value other than the true cash value, then a
penalty
equal to 20% of the tax shall be assessed in addition to
the
tax due under this act to the seller or
transferor.Notwithstanding section 22 of 1941 PA 122, MCL
205.22,
and section 3(4) of this act, if the seller or the buyer who has
paid the tax on behalf of the seller believes that the property was
eligible for an exemption under this subdivision at the time of
transfer, the seller or the buyer who has paid the tax on behalf of
the seller may request a refund from the department in a form and
manner determined by the department. This subdivision is
retroactive and applies to a sale, exchange, assignment, or
transfer on or after June 24, 2011.
(v) A written instrument transferring an interest in property
pursuant to a foreclosure of a mortgage including a written
instrument given in lieu of foreclosure of a mortgage. This
exemption does not apply to a subsequent transfer of the foreclosed
property by the entity that foreclosed on the mortgage.
(w) A written instrument conveying an interest from a
religious society in property exempt from the collection of taxes
under section 7s of the general property tax act, 1893 PA 206, MCL
211.7s, to a religious society if that property continues to be
exempt from the collection of taxes under section 7s of the general
property tax act, 1893 PA 206, MCL 211.7s.
