Tony Sokol, President of Valu Tec, shares helpful suggestions each month.
This month, Tony’s Tip addresses Michigan’s annual inflation rate – and how a little exercise in math can ensure your real property assessments remain fair and equitable in 2020.
October 22, 2019
Every October, the State Tax Commission calculates its inflation rate multiplayer by dividing the average U.S. consumer price index from the past 12 months, by the 12 months prior to that. The percent change is the maximum amount by which your assessor can increase your taxable value, assuming all other things have remained the same. For real property, that means there were no physical changes to your land or buildings, and you did not acquire the property sometime in 2019.
For 2020, the inflation rate multiplier is 1.9%. Therefore, if the above is true, then your 2020 taxable value should be no more than 1.9% higher than your 2019 taxable value.
If your 2020 taxable value is more than 1.9% higher, and there have been no improvements to your facility, then a short conversation with your assessor ought to correct the error!
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