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By Kate Hessling Assistant News Editor

UPPER THUMB When it comes to determining how wind turbines should be taxed, the State Tax Commission showed its hand when it took action last fall that would significantly lower values. Now, local governments in a statewide coalition have shown their hand.

The coalition has obtained a legal opinion and information to support the position that the state commissions ruling does not accurately reflect the true cash value of wind turbines.

Which hand will sway the ultimate decision of how turbines will be valued? Thats up to the local board of reviews and assessors.

The board is governed by the state Constitution, which requires it to work by fact when evaluating the taxable value of a property.

This is something thats been in Michigan law for a very long time, he said. They have to weigh the facts that they have and make a determination of what the value is.

The State Tax Commission is responsible for providing a format to help assessors determine the true cash value to be placed on a property. But, assessors and boards of review can consider other facts when determining true cash values, Schlichting said.

In fact, both assessors and boards of review have the legal authority and obligation to deviate from the use of the State Tax Commissions wind turbine assessment information if it determines the commissions findings do not reflect true cash value for the turbines being assessed, according to the coalitions legal opinion.

In making its changes last fall, the State Tax Commission determined the value of a one- to two-year-old turbine is much lower than previously considered. In determining the value, the commission ignored the income approach to valuating turbines because they are classified as personal property, according to a response to a Freedom of Information Act request that State Tax Commission Chairman Douglas B. Roberts sent the Michigan Township Association. The Michigan Township Association is part of the statewide coalition of local government officials from Huron, Tuscola, Sanilac, Gratiot and Mason counties.

The coalition had been working on obtaining the data the State Tax Commission used last fall when it made the changes that would lower the taxable value of wind turbines. An initial response to a FOIA request seeking a copy of that research that led to the change stated that no documentation exists with the Michigan Department of Treasury. In the response to a subsequent FOIA request, Douglas writes, the basis for change was common sense, because the commission could not find any sales studies for used wind turbines. Therefore, it couldnt use the usual selling price to define the true cash value of used wind turbines.

Read the original post:
Wind turbines: What are theyworth at tax time?