The Belding banner-news. (Belding, Mich.) 1918-1973, 1922-03-22
LAND CONTRAST
OWNERS MUST PAY
SPECIFIC TAX
STATE TAX COMMISSION CON-
CONDUCTING INTENSIVE
CAMP AIGN

sing that the campaign being con-
Quoted by that department to cause
the payment Of the specific tax on
land contracts is bearing much fruit
and that the efforts to uncover this
Class of property are being SO in
creased that when the campaign is
closed it is expected there will be
practically no land contracts in the
state upon which the tax has not
been paid
1t seems that prior to- 1911 mort
cages and land contracts were sub
ject to taxation at the same rate as
real estate, merchandise and other
tangible property, but the legisla-
ture of that year was persuaded by
the owners of such credits that the
state would derive much greater
revenue if small specific or re-
cording tax of 1-2 of / per cent was
levied, and that owners of such Gre
dts would no longer try to evade
taxation. Therefore a law. Act No.
81 of the Public Acts of 1911, was
passed which provided that tax
of five dollars per thousand should
be paid by every mortgage and land
contract at the time it was offered
for record and that thereafter such
credits should be exempt from fur
ther taxation The result, however,
has not fulfilled the promises. Not
only has the revenue been less than
under the general tax law. but
there has been no greater willing
ness TO pay the tax Because it is
necessary to record every mortgage
promptly in order to protect the tt
tie to real estate, the tax on mort
cages has been paid almost without
exception. but with land contracts
the result has been far different. 1t
is very seldom a land contract has
been recorded and consequently M
tax has been paid and owners OF
this class of credit have evaded the
tax even more successfully than un-
der the old law Until 1921 the law
did not clearly provide that contracts
could be assessed under the gener-
al tax law unless the specific tax
was paid, but as amended by Act
No. 213 there is now no question
but that it is the duty of the assess
ing officer to assess every contract
which has not paid the specific tax.
The tax commission at the pres
ent time is using almost it's entire
force in investigating this class of
property and before the close of the
campaign every portion of the state
will have been visited. The COM
mission will not only have its own
examiners engaged in this work, but
will also have the help of all the as
sessing officers in the state. more
than fourteen hundred in number,
and every owner of a land contract
is advised to pay the specific tax at
once or he will be subject to the pro-
visions of the general tax law which
provides for an annual tax the rate
of which ranges from two per cent
to six per cent, depending upon the
locality in which the owner resides.
The Attorney General of the
state has assured the commission
that the law is constitutional and
enforcible and with the broad pow
ers conferred on the tax commission
by the tax law, by which it can COM
pei the disclosure of information
from many sources, there is small
chance that many contracts will es-
cape taxation. Until the meeting
of the board of review of the town.
ship or city, owners of contracts
have the privilege of paying the spe-
cific tax and being exempt from the
general tax, but any contracts found
after that date will be put on the
rolls by special review, provision for
which is made in the tax law.
No effort will be made to require
the recording Of the contract. All
/ that the commission intends TO en-
/ force is the payment of the tax to
! the county treasurer in the county
J ~, tx,hioh The ic 1nootAI nd
the recording of the contract will
then be optional with the owner.
The tax is small one and is
therefore not burdensome and it is
only a spirit of fairness to the own
ers of other porpertv that prompts
this campaign. 1t is only by en-
forcing all the tax laws that the
burden on the owners of real estate
can be lessercd. Even thorch the
so-.l1, tax is small, the -. II. e
AK n,-t;trl, viii smount u hin-
dre3s - IA = Of do ~, NJ. as
i: is divided equally between the
| state and the county it will result
in a measure of relief to every prop
erty owner. The owner of mort
cages has, had to pay the tax, and
in fairness to him the owner of land
contracts must do the same.
There is an idea held by some that
the purchaser of the property is re-
quired to pay the tax. This is not
true. This law presumes that the
tax will be paid by the holder of
the contract, the party who sold the
property.
1t must be understood that no al
lowance can be made for "a prior
contract or mortgage on the same
property. The tax must be paid on
each contract regardless of any 9TH
er encumbrance on the property.
Reports from all over the state
are to the effect that owners Of con-
tracts are availing themselves of the
privilege accorded them by this law
and those who do not do so will be
certain to regret their attempt to
avada this extrenelv small tax