UPDATE!
The Michigan Supreme Court reversed this decision by
Order (101k) dated February 1, 2008. The Court ruled that the
transfer tax act taxes recorded instruments, and the only
recorded instruments in this case were the deeds. Further the tax
is based on the value exchanged for the deed. Because the deeds
conveyed both the lots and the homes, Petitioner should have paid
transfer taxes on the combined values.
Petitioner could have paid transfer taxes
only on the lots if it had deeded the unimproved lots first, and
then entered into separate agreements to construct the homes.
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