December 1, 2015, Introduced by Senator HERTEL and referred to the Committee on Finance.
A bill to amend 1966 PA 134, entitled
"An act to impose a tax upon written instruments which transfer any
interest in real property; to provide for the administration of
this act; and to provide penalties for violations of this act,"
by amending sections 1, 2, and 5 (MCL 207.501, 207.502, and
207.505).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. As used in this act:
(a)
"Treasurer" means the county treasurer.
(a) "Controlling interest" means more than 80% of the total
value of all classes of stock of a corporation; more than 80% of
the total interest in capital and profits of a partnership,
association, limited liability company, or other unincorporated
form of doing business; or more than 80% of the beneficial interest
in a trust.
(b) "Person" means every natural person, association or
corporation. Whenever used in any penalty clause the term "person",
as
applied to associations, means the partners or members thereof,
of the association, and as applied to corporations, the officers
thereof.of the corporation.
(c) "Transfer", unless otherwise exempt under this act, means
the conveyance of title to or other transfer of a present interest
or beneficial interest or any other interest in real property by
any method, including the interest in real property acquired
through the acquisition of a controlling interest in any entity
with an interest in the property.
(d) "Treasurer" means the county treasurer.
(e) (c)
"Value" means the current
or fair market worth in
terms of legal monetary exchange at the time of the transfer. The
tax shall be based on the value of the real property transferred
and shall be collected at the time the instrument of conveyance is
submitted for recording. In the case of a controlling interest in
any entity that owns real property, value shall mean the value of
the real property or interest in the real property, apportioned
based on the percentage of the ownership interest transferred or
acquired in the entity.
Sec. 2. (1) There is imposed, in addition to all other taxes,
a tax upon the following written instruments executed within this
state
when said the instrument is recorded.
(a) Contracts for the sale or exchange of real estate or any
interest
therein in real estate or any combination of the foregoing
or
any assignment or transfer thereof.of real estate or of an
interest in real estate.
(b) Deeds or instruments of conveyance of real property or any
interest
therein, in real property,
for a 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 tax shall be upon the person who is the seller or
grantor.
(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.
Sec. 5. The following instruments and transfers shall be
exempt from this act:
(a) Instruments where the value of the consideration is less
than $100.00.
(b)
Instruments evidencing contracts or transfers which that
are
not to be performed wholly within this state insofar as such
only to the extent that the instruments include land lying outside
of this state.
(c)
Written instruments which that
this state is prohibited
from taxing under the United States constitution or federal
statutes. of
the United States.
(d) Instruments or writings given as security or any
assignment
or discharge thereof.of a
security interest.
(e) Instruments evidencing leases, including oil and gas
leases,
or transfers of such leasehold interests.
(f) Instruments evidencing any interests which are assessable
as personal property.
(g) Instruments evidencing the transfer of rights and
interests for underground gas storage purposes.
(h)
Instruments Any of the
following instruments:
(i) Instruments in which the grantor is the United States, the
this
state, or any political subdivision
or municipality thereof,
or
officer thereof of this state
or is an officer of the United
States, this state, or a political subdivision or municipality of
this
state acting in his or her official
capacity. ;
(ii) Instruments given in foreclosure or in lieu of
foreclosure of a loan made, guaranteed, or insured by the United
States,
the this state, or
any political subdivision or
municipality
thereof or officer thereof of
this state or by an
officer of the United States, this state, or a political
subdivision or municipality of this state acting in his or her
official
capacity. ;
(iii) Instruments given to the United States, the this state,
or 1 of their officers as grantee, pursuant to the terms or
guarantee or insurance of a loan guaranteed or insured by the
grantee.
(i) Conveyances from a husband or wife or husband and wife
creating or disjoining a tenancy by the entireties in the grantors
or the grantor and his or her spouse.
(j) Judgments or orders of courts of record making or ordering
transfers, except where a specific monetary consideration is
specified
or ordered by the court therefor.of record.
(k) Instruments used to straighten boundary lines where no
monetary consideration is given.
(l) Instruments to confirm titles already vested in grantees,
such
as including quitclaim deeds to correct flaws in titles.
(m) Land contracts whereby the legal title does not pass to
the grantee until the total consideration specified in the contract
has been paid.
(n) Instruments evidencing the transfer of mineral rights and
interests.
(o) Instruments creating a joint tenancy between 2 or more
persons where at least 1 of the persons already owned the property.
(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.