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'Bad' MI court decision could cost 'most vulnerable' thousands at tax time

The decision will mean fewer qualify for a tax exemption intended for disabled veterans and surviving spouses. The 13 OYS Help Team stepped in.

SPARTA, Michigan — Lt. Richard Johnston fought for freedom and served our country.

Like so many Vietnam veterans, the West Michigan man was exposed to Agent Orange during his service and eventually died several years ago.

Decades later, his widow is fighting for the benefits he rightfully earned as a disabled veteran.

After encountering several roadblocks—including the obstacles introduced by a recent appeals court decision—she and others contacted the 13 ON YOUR SIDE Help Team.

“Our veterans and service people have to continually fight to get what they deserve and as a surviving spouse, I still have to fight.”

This time, Sue Johnston’s fight hangs on an email she recently received from the local tax assessor.

The Sparta woman’s late husband was stationed in Vietnam, where he served his country as a lieutenant beginning in 1969.

“He trained the local people there for combat,” she related.

There, he came in contact with the chemical known as ‘Agent Orange.’

“We didn't know for a long time,” Johnston said. “Then he had a minor procedure, which woke up the poison. And he immediately started having problems with balance and falling and got to be weary. He was falling daily.”

The diagnosis was progressive supranuclear palsy.

The VA determined the condition was combat-related and that the lieutenant was 100% disabled.

Before the illness ultimately took his life in 2020, the couple applied for—and later received—full benefits, including a state property tax exemption intended for similarly disabled veterans and surviving spouses.

“The idea was that someone who had been completely disabled 100% permanent by their service with the United States military… a provision that they not pay property tax.”

Richard Overton describes himself as a life-long advocate.

A veteran himself, Overton worked to get the exemption he’d seen in other states on the books in Michigan.

“We did some research, authored some documents… it ultimately became part of the statute,” Overton noted.

The result was MCL 211.7b.

The legislation says in part ‘real property used and owned as a homestead by a disabled veteran… is exempt from the collection of taxes under this act.’

The exemption goes on to list surviving spouses as beneficiaries if ‘a disabled veteran who is otherwise eligible for the exemption under this section dies either before or after the exemption is granted.’

“It couldn't be simpler,” Overton related. “Yet we've gotten all kinds of interpretations about generally trying to tie the veteran not being tied to the property.”

Overton referred to a recent appeals court decision he worried would entail a fundamental setback.

In Lockhart versus Ontonagon Township, the court ruled ‘in cases where a disabled veteran did not own the property, his or her surviving spouse is also not eligible for the exemption.’

The ruling noted the court disregarded earlier, opposing guidance from the state tax commission, which concluded the exemption was ‘not tied to any property.’

“What's problematic… is a sentence at the bottom of the state Treasury Department's advisement.”

That sentence asked that the decision be disseminated to local assessors and applied to similar requests, a move legal experts chided as compounding what they viewed as a questionable ruling.

“It's reading something into the statute that does not exist,” Attorney Matt Cooper related. “When you've lost a loved one because they paid the ultimate sacrifice for the defensive needs of our nation… who isn't more eligible for this type of benefit?”

Cooper is an expert in the field who often represents vets and military spouses in cases involving service-related benefits. 

“It's absolutely going to be used as a precedent,” he said of the decision. “We're going to see a lot of widows and surviving spouses out there denied the property tax exemption that is fully set forth in the statute that was intended by our legislature.”

It’s ironic, they said, the individuals most in need of relief also number among those least able to fight for the benefits to which they’re entitled.  

“This is a very small and select group… they died because of service to this country. This is a tax benefit to their spouse and can be very meaningful,” Overton said. “There's lots of things that are exempt—churches, schools, those types of things. You don't scream about those. Why are you screaming about this?”

A rude awakening Sue already received.

Making a fresh start, she made the decision to downsize after her husband passed away, closing on her new home in July.

Because she moved, Sue was told she wouldn’t qualify for the exemption this year.

“It's a constant fight for benefits, constant,” she said. “It's very wearing on a person, and after you fought to have your husband receive the benefits that he deserved, and the care that he deserved, which I'm very grateful for... but it was a fight. Now I have another one.”

Sue told 13 ON YOUR SIDE that she had contacted state tax authorities, advocates and various other agencies with no intention of giving up.

If you’re concerned yourself or a loved one may be affected by the change, advocates suggest reaching out to state lawmakers to request the law be further clarified, which they suggested would ensure those for whom the exemption was intended would receive the benefits to which they were entitled.

13 ON YOUR SIDE attempted to contact the court but did not receive a response ahead of publication. 

View The General Property Tax Act excerpt here:

View the Michigan Court of Appeals documentation here:

View the Disabled Veterans Exemption FAQ here:

Jay and Charlie may be the faces of the HELP Team, but there are more members behind the scenes working to get the job done. HELP Team stories can be seen on weekdays at 6 a.m. and 6 p.m. and at www.13HelpTeam.com. People are encouraged to contact the HELP Team by calling 616-559-1313 and leaving a message or emailing help@13onyourside.com.

   

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