Zoning district, tax assessor classifications not the same thing

Some use tax assessor classifications as an indicator of zoning district. They are not the same and one should never base zoning decisions on property tax classifications.

March 24, 2013 - Author: Kurt H. Schindler,

One of the reoccurring misperceptions, which just does not seem to go away, is the belief that the tax classification on one’s property tax bill is the same as the zoning district one is in.

They are not the same.

Michigan State University Extension specialists in planning and zoning often receive questions on this topic. (Related articles: March board of review is landowners opportunity to protest property tax issue; Qualified agricultural property exemption not necessarily tied to property classification).

The tax assessor classifies properties and takes that data to study property values in a given area. The assessor will group all of a certain type of residential property so residential values are only being compared to like residential land. One may not want residential to be grouped with commercial for purposes of assessing property value.

One part of the General Property Tax Act (MCL 211.34c(2) strictly defines each property classification. The tax assessor has many possible sub-classifications which are based on the actual use of the land. They include:

  • Agricultural (includes sub-classifications 101-160 for agricultural: improved, vacant, building on leased land, and other agricultural categories)
  • Commercial (includes sub-classifications 201-251 for commercial: improved, vacant, renaissance zones, condominiums, personal property, and more)
  • Industrial (includes sub-classifications 301-352 for industrial: improved, vacant, renaissance zones, personal property, and more)
  • Residential (includes sub-classifications 401-460 for residential: improved, vacant, condominiums, and more)
  • Timber (includes sub-classifications 501-5 for timber: cutover, Commercial Forest Act, and more)

There are other categories. Michigan provides a partial list of recommended classification codes online.

Zoning district names have the same titles (agricultural, commercial, industrial and residential), but they have different purposes.

A local government adopts a Master Plan using a process spelled out in the Michigan Planning Enabling Act. Part of the plan will include discussion on zoning, and will include a future land use map. The plan expresses a future vision for a community and shows where different forms of growth should occur.

The local government then might adopt a zoning ordinance using processes, protocols and restrictions spelled out in the Michigan Zoning Enabling Act. A zoning ordinance includes a zoning map that shows zoning districts. Over time the zoning map is updated and gradually starts to look similar to the future land use map.

Those zoning districts are often given names denoting where that type of development is to occur. There is not any standardization of zoning district names in Michigan. Some communities name their zoning districts after a colloquial place name, or neighborhood name such as “Chalktown District.” Others just use a letter-number system such as R-1, R-2, etc. Residential R-1 might be the least dense single-family area in one community but the most dense multiple family in another.

With zoning one does not rely on the name of the zoning district, rather, one looks at the details in the zoning ordinance to see what that district is about and what land uses and forms might be allowed. Zoning is talking about what the use and forms can and cannot be today and in the immediate future. Tax classifications, meanwhile, talk about the actual use already on the land. The tax assessor is classifying property based on what the current use of parcels are for purposes of comparing like-land in order to calculate property values and generally uses a statewide classification system with uniform names.

Because of these differences, one should never base zoning decisions on what appears on a property tax bill or assessment notice.

Tags: fiscal management, msu extension, planning, public policy


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