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Michigan Supreme Court clarifies eligibility requirements for charitable institution property tax exemption

On June 28, 2017, the Michigan Supreme Court unanimously held that a charitable institution that imposes certain restrictions or conditions on its beneficiaries may still qualify for a property tax exemption provided the restriction or condition bears a reasonable relationship to a permissible charitable goal. In reaching its decision, the court clarified the correct analysis to use in determining whether an institution impermissibly offers its charity on a “discriminatory basis.” Because both of the prior decisions in this litigation were based on a misinterpretation of the law, the case was remanded to the Michigan Tax Tribunal for further proceedings consistent with the Supreme Court decision.