Bill
HB 5246
HB 5246 designates marijuana cultivation parcels as commercial real property for Michigan property tax, changing assessments and levies for owners and local governments.
Status and timeline
- Introduced: March 14, 2025 (sponsor: Rep. Tom Kunse).
- Passed both chambers in May 2025 after conference committee action.
- Signed by the Governor: June 20, 2025.
- Effective date: September 1, 2025.
Purpose and intent
- HB 5246 amends section 34c of Michigan’s General Property Tax Act (1893 PA 206; MCL 211.34c) to add parcels used to cultivate marihuana to the definition of "commercial real property." The bill’s purpose is to change the property-tax classification applied to properties used for marihuana cultivation.
Key provisions
- Adds a new clause under the statutory list of "commercial real property" specifying that parcels used to cultivate marihuana are commercial property for property-tax classification purposes.
- Relies on the definitions of "cultivate" and "marihuana" found in section 3 of the Michigan Regulation and Taxation of Marihuana Act (2018 IL 1, MCL 333.27953).
- Leaves other classification rules (agricultural, industrial, developmental, etc.) intact; the change is limited to classification language in MCL 211.34c.
Who is affected
- Property owners and lessees whose parcels are used to cultivate marihuana: their land will be classified as commercial real property for assessment purposes.
- Marihuana cultivators and businesses leasing property for cultivation may see changes in assessed value, applicable tax treatments, and eligibility for certain classifications or exemptions tied to other property types (for example, agricultural classifications).
- Local assessors, county equalization departments, and the State Tax Commission: must apply the amended classification when completing annual assessments and reporting.
- Local units of government and school districts: potential changes in tax base composition could affect levy distributions and revenues (see fiscal implications below).
Practical effects and fiscal implications
- Classification determines assessment treatment and which millages may apply; reclassifying cultivation parcels as commercial could change taxable value calculations and exposure to commercial millages vs. other classifications.
- The fiscal impact will vary locally depending on the number and value of cultivation parcels and the difference in tax treatment compared with their prior classification (e.g., agricultural or vacant).
- HB 5246 does not change land-use zoning, licensing, or regulatory rules for marihuana businesses — it only addresses property-tax classification.
Procedural/administrative notes
- Assessors perform annual property classifications not later than the first Monday in March; the amendment will be applied during those regular assessment cycles and reported through county equalization and the State Tax Commission as required by the General Property Tax Act.
- The bill cross-references existing definitions in the Michigan Regulation and Taxation of Marihuana Act for clarity on what constitutes "cultivate" and "marihuana."
Overall
- HB 5246 is a targeted statutory change that specifically designates marihuana cultivation parcels as commercial real property for property-tax purposes, shifting assessment classification and potentially affecting tax liabilities and local revenue distribution without altering regulatory licensing or zoning for marihuana activities.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
