HB-4643, As Passed Senate, May 23, 2018

SENATE SUBSTITUTE FOR

HOUSE BILL NO. 4643

     A bill to amend 1993 PA 330, entitled

"State real estate transfer tax act,"

by amending section 6 (MCL 207.526), as amended by 2015 PA 217.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     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 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

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 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 by the seller or transferor 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 determined as of the first tax day after the

issuance of a certificate of occupancy for the residence, or the

date of acquisition of the property, whichever comes later, 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.

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.beginning 4 years immediately preceding the effective

date of the amendatory act that amended this sentence subject to

the statute of limitations period provided in section 27a of 1941

PA 122, MCL 205.27a. A taxpayer that claimed a refund under this

subdivision prior to the effective date of the amendatory act that

added this sentence and whose refund was denied and not appealed in

accordance with section 21 or 22 of 1941 PA 122, MCL 205.21 and

205.22, may claim a refund under this subdivision notwithstanding

section 22 of 1941 PA 122, MCL 205.22.

     (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.