Applying for exemption from Personal Property Tax

Jul 19 17:27 UTC 2001

Mr. Ashley was very polite to us and we talked for a good half an hour. The main points I gleaned from the meeting are these:

1. The personal property tax law is a state law, administered by the City. The State tries to keep the rules for exemptions uniform across the State. The main criterion for granting exemption is that an institution must relieve the government of some burden.

2. Mr. Ashley tries never to make new policy. If he gets an application from an organization which is unlike any that has been granted exemption before (according the books he has on hand, which have records of all the exemption cases around the State), he always denies the application.

3. If an application is denied, the applier can appeal the decision to the City's Board of Review, which is three people appointed by the City Council who meet three times a year, but only once a year (in March) do they consider exemptions.

4. If the Board of Review turns down the application, the applier can appeal to the Michigan Tax Tribunal. It's they who have the authority to make new policy (for the whole state). Cases before the Tribunal are usually argued by lawyers.

5. Mr. Ashley said he would certainly look over our whole application, but that he doesn't believe an institution like Grex has ever been granted exemption before, so he would very likely deny our application for exemption. That means we would probably have to go at least as far as the Tribunal to get a decision in our favor.

Colleen and I tried what we thought were our best arguments on Mr. Ashley. First we pointed out that Grex provides internet access to all people in Ann Arbor, 24 hours a day, which is similar to what the District Library does, only more comprehensive (timewise). Mr. Ashley found it dubious that duplicating what the library does was relieving the government of a burden. Libraries themselves are exempt, though, so Colleen tried arguing that Grex's conferencing system is in fact a library, since it is searchable and contains a wealth of knowledge. Mr. Ashley didn't think that we could really call it a library, though.

response 2 of 24:

Jul 20 00:43 UTC 2001

Okay, I'm sorry to say this, but what a prick!  I don't get people who run
with the theory of "It hasn't been done before, therefore it cannot be done."

response 4 of 24:

Jul 20 01:13 UTC 2001

Actually, he's not a prick at all.  His job is to ensure that the City of
Ann Arbor collects as much of the assessed taxes as possible.  Every
dollar that we are exempted from paying is a dollar that is not available
for city services that we use like fire department, streets department,
etc.  We are essentially asking that we have city services available to
us without paying for them.  

In his case, he is trying to keep his personal feelings out of the
process.  If the Tax Tribunal has made a state-wide decision that applies
to us, he applies it.  If no ruling has been made, and there is no clear
statement in the law that internet service providers are exempt, he
doesn't "make new law" by granting us an exemption.  He passes that
decision on to the state-wide tribunal so that the process is applied as
consitently as possible across the state.  

response 6 of 24:

Jul 20 17:42 UTC 2001

   Given the incredible odds against us, I can see not filing.   But what
a wonderful system we have.  My absolute disgust with government has only
increased with this entire incident.  What galls me the most is the way
it's set up, the barriers are raised to high, and the automatic denials
make it completely discouraging to even attempt.  It's probably not worth
it, filing.

response 8 of 24:

Jul 20 19:27 UTC 2001

I don't think we should file.  

response 10 of 24:

Jul 21 03:53 UTC 2001

What about all the cities that DON'T bother to try to assess
personal-property tax against non-profits (or at all)?  Isn't
that a different standard?

$116 a year is two members.  Grex uses a lot less police, fire,
garbage and such services than the average individual, and
individuals don't have to pay this tax.

I think the ridiculous lengths that Ann Arbor is going to to
collect a lousy $116/year, and how much it wastes, merits some
kind of protest.  Maybe that should take the form of filing for
an exemption, maybe not.

response 12 of 24:

Jul 21 17:11 UTC 2001

Russ: $116 is not nothing, certainly.  But it won't break us, and compared
to the price of hiring a lawyer to argue for us in front of the Michigan Tax
Tribunal, it's not very much.  If we had a lawyer who was willing to do it
for free, that might be a different matter.  But it still would be more
productive, I think, to spend time trying to raise a little extra money,
than fighting city hall.

response 14 of 24:

Nov 9 01:09 UTC 2001

It's just reality, STeve.

response 16 of 24:

Nov 9 21:11 UTC 2001

   It is a reality Mark, but it isn't the only one.  There are various
"reinventing government" movements which have dealt with this exact issue,
namely the cost of administrating things and how to deal with that.  The
leading group for this zeems to be in New Zealand, where such inequities
have been examinded AND DONE AWAY WITH.  I know a group in Boston who is
doing the same thing.
   Probably I should gather up some of my notes on this and start an item
in Agora.  The phrase "its just reality" is true, but it doesn't have to 
be that way.  We can have more intelligent government.

response 18 of 24:

Nov 9 21:36 UTC 2001

Geez, I always thought it was:

        Grant me the serenity to accept the things I cannot change,
        the courage to to accept the things I can
        and the wisdom to hide the bodies of those who got in my way.

response 20 of 24:

Nov 9 21:50 UTC 2001

(Actually, I did get it wrong: it should be "the courage to *change* the
things I can".)

response 22 of 24:

Nov 13 01:35 UTC 2001

I suppose that one of the possible (likely?) results of this
fiscally ridiculous harassment from the city is that Grex will
move out of Ann Arbor at some point.  It would perhaps be more
fitting to leave some item of trivial value so that a tax check,
amounting to less than the city's per-item deposit fee, has to
be sent in once a year.  Then this could be brought up before
City Council until they get rid of such nuisance taxation.

response 24 of 24:

Nov 14 13:56 UTC 2001

Believe me, City Council won't pay a bit of attention.  The City
Council, through its employee, the tax assessor, collects all the
taxes it is able to collect, and cannot treat one group differently
than other groups.

The appeal for this is to the State Tax Tribunal, not the City
Council.  The city must follow state law in this case.  The only
exceptions to this tax are for not-for-profit organizations that
provide a service the city would otherwise have to provide itself.