House Finance Committee hears bill to treat postmark as property tax payment date

The Michigan House Standing Committee on Finance heard testimony Tuesday on House Bill 47-99, which would make a taxpayer's postmark date the operative date for determining whether a property tax payment was made on time and would bar interest and penalties when the payer can show the payment was postmarked by the due date.

Supporters said the change would align property tax practice with most other taxes and protect taxpayers who mailed payments on time but whose envelopes were not received by part-time or understaffed local offices. Randy Gross, vice president of tax policy at the Michigan Chamber of Commerce, told the committee that the bill brings property-tax practice into line with federal and most other state tax rules. "If a taxpayer pays their tax bill prior to the due date and it's postmarked and they can show that, they shouldn't be subject to any fees or interests that are associated with that payment," Gross said.

Zach Mattice, director of tax for ITC Holdings Corp., described repeated incidents in which his company mailed payments well before the due date yet later faced local assessments of interest and penalties because the local office had not logged receipt. "We consistently mail payments a month before the due date ... We also track our payments to see if they've been cashed or not," Mattice said, adding that limited local office hours, PO boxes and undelivered mail increasingly produce these disputes.

Supporters, including Representative Lightner (who presented the measure and introduced industry witnesses), said electronic payments are an alternative but not yet universally available at the local level.

Opponents, led by Judy Elam of the Michigan Townships Association and Alan Fox, Ingham County treasurer, said the bill would disrupt statutory timelines in Michigan's property tax system and impose administrative burdens on local units. Elam said the bill would remove existing local flexibility and create new enforcement problems when postmarks are missing or indiscernible. "This bill removes that flexibility that exists right now and it changes it to a must and with no period of time," Elam said.

Fox, speaking for the Michigan Association of County Treasurers, said Michigan's system differs from many states because local units bill taxes and turn the rolls over to counties on fixed dates. He warned that allowing postmarked payments to be claimed after March 1 could delay the county's mandated reconciliation and reimbursement process: "Anything that carries the process over past March 1 will cause serious issues for the ability of the counties to reimburse the local units," Fox said, citing statutory deadlines in the General Property Tax Act.

Committee members asked whether the bill would create a practical burden of retaining envelopes and determining postmark authenticity; supporters said taxpayers can provide proof (certified mail receipts or tracking) and that the onus should be on the payer to demonstrate timely mailing. Opponents raised additional concerns that postage meters and indistinct postmarks could be misused and that imposing a bright-line postmark rule could encourage gaming of payment timing.

No formal vote on House Bill 47-99 was taken by the committee during the hearing. The committee took testimony from business groups, utilities and county and township associations and then proceeded to the next items on the agenda.

Votes at this hearing: none recorded for HB 47-99.