MGM’s Property Tax Claims Survive Michigan Court’s Scrutiny

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By Ryan Prete

The MGM Grand Detroit, LLC can seek a refund of property taxes after the Michigan Court of Appeals ruled that it can bring a claim challenging the City of Detroit’s assessment of the casino ( MGM Grand Detroit, LLC v. City of Detroit , 2017 BL 294876, Mich. Ct. App., No. 332000, 8/22/17 ).

In an August 22 opinion, a three-judge panel reversed the Michigan Tax Tribunal’s judgment granting summary disposition in favor of Detroit.

MGM challenged the city’s assessment, alleging that a uniform method of assessment wasn’t used for all three casinos located in Detroit, including MGM’s casino. According to the opinion, MGM alleged that both it and the city assessor believed that a uniform method was used. However, MGM “noted a marked disparity in its assessment compared with the other two Detroit casinos” and filed a petition claiming that a “mutual mistake of fact” resulted in an overpayment of property taxes for the 2012-2014 tax years.

The Tax Tribunal ruled that uniformity of MGM’s property assessment was a legal issue, not relating to a mutual mistake of fact, and found the petition was untimely filed. On appeal, the Court of Appeals agreed with MGM’s assertion that the tribunal erred in finding that the casino had pled a mistake of law rather than a mutual mistake of fact.

“MGM asserted that the ‘mutual mistake’ was the belief by it and the assessor that the 2012-2014 assessments for all three casinos would be uniform, and this ‘mutual mistake’ hinges upon the factual question of whether the assessment of its property was done in a way that was uniform with the other two Detroit casinos’ assessments,” according to the opinion. “Keeping in mind that a (C)(8) motion is to be decided on the basis of the pleadings alone and that Michigan is a notice pleading state, we are satisfied that MGM set forth a claim under MCL 211.53a.”

The court found MGM’s assertions qualified as allegations of a mutual mistake of fact sufficient to survive summary disposition and remanded to the Tax Tribunal for further proceedings.

MGM Resorts International operates casinos all over the globe and holds a market cap of $18.1 billion.

To contact the reporter on this story: Ryan Prete in Washington at rprete@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

Text of the opinion is at http://src.bna.com/rU2.

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