Calculating Taxes | Midland, MI

Taxable Value vs. Assessed ValueUntil 1994, property in Michigan was assessed at half its market value for tax purposes. This is known as a property’s assessed value (AV). In 1994, Michigan voters passed Proposal A, which changed the State Constitution.Proposal AProposal A shifted some of the tax burden off of property and onto the sales tax, which rose from 4 to 6 cents on every dollar spent. The result of this proposal was the development of a new way of calculating property taxes using what’s known as a property’s taxable value (TV). A property’s TV is determined using 1 of the equations below (whichever is less):(Last year’s TV) - (losses) + (5%) + (additions)(Last year’s TV) - (losses) + (the rate of inflation) + (additions)Under Proposal A, the growth of a property’s TV is limited - or "capped" - with annual increases of not more than the lesser of 5% or the Consumer Price Index (CPI), which is set by the Michigan State Tax Commission.UncappingBecause of how TV is calculated, it...