Michigan
For the complete text of Michigan statutes and other property tax information please refer to the Michigan Department of Treasury.
Property Classification:
For property tax purposes real property is broken down into 6 classifications:
Agricultural real property - includes parcels used partially or wholly as farm land, and parcels assessed to the Department of Natural Resources and valued by the State Tax Commission.
Commercial real property - includes platted and unplatted parcels used for commercial purposes, whether wholesale, retail, or service; parcels used by fraternal societies; and parcels used as golf courses, boat clubs, ski areas, or apartment buildings with more than four units.
Developmental real property - includes parcels containing more than five acres without buildings or more than 15 acres and whose sale value exceeds its present use value. It may include farm land or open space land adjacent to a population center or farm land subject to several competing valuation influences.
Industrial real property - includes platted and unplatted parcels used for manufacturing and processing; parcels used for utility sites for generating plants, pumping stations, switches, substations, compressing stations, warehouses, and right of way, flowage land and storage areas; and parcels used for removal or processing of gravel, stone, or mineral ores.
Residential real property - includes platted or unplatted parcels, and condominium apartments used or that will probably be used for residential purposes; and parcels in an area used predominantly for recreational purposes that are used or that will probably be used for recreational purposes, such as lake lots and hunting lands.
Residential real property - includes parcels stocked with merchantable forest products, cutover forest land with little or no merchantable products, and marsh lands or other barren land. When purchased for residential or recreational use, the land will be classified as residential.
Private Forest Reservation: (Sec. 324.51301, M.C.L.)
Qualification - The owner or operator of a tract of land not exceeding 160 acres, where at least 1/2 of the land is improved and devoted to agricultural purposes, may designate a portion of that land, not exceeding 1/4 of the total area of the tract, as a private forest reservation upon filing with the treasurer of the county in which it is located a description of the forest reservation.
The supervisor or assessor shall personally examine the various private forest reservations when the real estate is assessed for taxation, and note upon return the condition of the trees and whether the trees are properly planted and continuously cared for. If the private reservation is properly planted and continuously cared for the part of its value over and above $1.00 per acre, is exempt from all taxation.
To come within the exemption, the owner must plant at least 1,200 trees per acre. Upon any tract selected as a private forest reservation that is partially stocked with forest trees, the owner may plant a sufficient number of forest trees to assure a spacing of approximately 6 feet by 6 feet on the open areas.
No cattle, horses, sheep, hogs, or goats may pasture upon the land until at least 90% of the trees are two inches in diameter.
Withdraw - If the owner of a private forest reservation wishes to withdraw land from the classification of a private forest reserve, or fails to comply with with the rules established above, the tax assessor of the district shall estimate the cash value of the timber on the stump and the owner shall pay a fee of 5% of the appraised valuation.
Commercial Forest Reserves: (Sec. 324.51105, M.C.L.)
Qualification - An eligible commercial forest is "forestland" capable of producing (1) not less than 20 cubic feet per acre per year of forest growth upon maturity, (2) economically valuable trees, and (3) a commercial stand of timber within a reasonable time.
Forestland - is defined as land that is an integral part of a managed forest and (1) that does not have material natural resources other than those suitable for forest growth, (2) that is not used for agricultural, grazing, industrial, developed recreational, residential, resort, commercial, developmental, or certain mineral extraction purposes, and (3) that the owner agrees to develop, maintain, and actively manage as a commercial forest in a prescribed manner.
Assessment - Lands approved as commercial forests are exempt from property taxation . In lieu of property taxation, these lands are subject to an annual specific tax of $1.10 per acre, as adjusted in 2006 and every tenth year thereafter. This specific tax is collected by the township treasurer at the same time and in the same manner as general property taxes are collected.
An application for commercial forestland must be accompanied by (1) a nonrefundable fee in the amount of $1 per acre or fraction thereof, not to exceed $1,000, (2) a legal description of the property, (3) a certified statement that the property is covered by a forest management plan, and (4) a certified statement that the owner of the forestland owns the timber rights to the property.
Generally, forest products may not be cut, harvested, or removed from commercial forests. However, under certain circumstances including the preparation, certification, and use of forest management plans, commercial forests may be harvested without affecting their status as commercial forests and without payment of fees or penalties.
Forest management plan - is a written plan prepared and signed by a registered forester or natural resources professional that prescribes measures to enhance production, use, and regeneration of forest resources. It must include schedules and timetables for the forestry practices to be used on the land, including timber harvesting and regeneration.
Penalties for withdraw - An owner may withdraw land, in whole or in part, from the commercial forest classification upon the filing of a proper application and the payment of certain penalties and fees. Generally, the withdrawal application fee is $1 per acre. However, there is a minimum fee of $200 and a maximum fee of $1,000 per application. In addition, a per acre penalty is imposed equal to the product of the current average property tax per acre on timber cutover realty times (1) for commercial forest held as such before January 1, 1994, the number of years, up to 7 years, that the land was so held, or (2) for commercial forest held as such after December 31, 1993, the number of years, up to 15 years, that the land was so held.
Fees and penalties are waived when commercial forestland (1) is donated to a public body for public use before withdrawal of the classification, (2) is exchanged for property belonging to a public body if the property received is properly designated as commercial forestland, or (3) is condemned for public use.
Severance Tax:
Under the "private forest reservation" classification when the owner cuts and harvests trees other than for personal use, the stumpage value of the timber cut is assessed and the owner must pay the collector of taxes 5% of the assessed value.
Exemptions:
Renaissance Zones - Commercial forestland located in a Renaissance Zone (RZ) is exempt from the annual specific tax levied on lands approved as commercial forests (Sec. 324.51105, M.C.L.).