LANSING – Farmers who transfer their agricultural property into a Limited Liability Company (LLC) will no longer be automatically excluded from Michigan's property tax deferment under a bill that passed the House today. House Bill 4218, introduced by State Representative Dudley Spade (D-Tipton), specifies that farmland owned by an LLC can receive a property tax deferment provided the owners of the property would otherwise qualify.
"More and more farmers are realizing that they can be held liable if someone is injured on their land, even if the person is there without permission," Rep. Spade said. "Many have started to use limited liability companies to protect themselves, but in doing so have lost the ability to qualify for tax deferments, which are crucial to farmers who rely on the proceeds from their harvest to pay the bills. This land is still being farmed and its owners still rely on it as their primary source of income, so there is no reason that they should be excluded from Michigan's tax deferment program."
Under current law, a property owner may claim an agricultural deferment if the piece is classified or used as agricultural property and the owner's household income does not exceed the gross receipts of the agricultural or horticultural operation on the land.
HB 4218 passed the House unanimously and is headed over to their Senate for their consideration. Provided the Senate and Governor act quickly enough, farmers who would fall under this bill could potentially qualify for a deferment on their 2009 summer taxes.