Payments in lieu of taxes (PILT)

  • PILT are statutorily required to be made by the state of Michigan to local units of government for public land that is managed by the DNR and for privately owned land that is retained for long-term timber production.
  • Lands administered by the DNR are the only state-managed lands that PILT is required to be paid on. No other state agency is responsible for paying PILT on the lands that they administer.
  • PILT payments are made from line item appropriations in the Department of Treasury appropriations act and the School Aid Act.
  • The types of PILT payments are divided into three categories:
    • Swamp and Tax Reverted Lands
      • PILT paid for lands that were acquired by the DNR due to tax reversion for non-payment of taxes on private lands.
      • All land that came to the state due to non-payment of taxes prior to 1999 went to the DNR.
      • Following the passage of Act 123 of 1999, lands that revert due to non-payment of taxes now go to the county, rather than the state.
      • Prior to 2014, PILT payments made to counties for lands in this category was set at $2/acre.
      • Beginning in 2014, this PILT payment increased to $3/acre.
      • In 2015, the PILT payment increased to $4/acre.
      • Since 2016, the PILT payment now increases 5% or the rate of inflation, whichever is less.
      • PILT payments are required to be issued annually by Dec. 1 and are made from the state General Fund.
      • Payments are issued to the county with 50% disbursed to the county General Fund and 50% disbursed to the Township General Fund.
    • Purchased lands
      • PILT paid for lands that are acquired by the DNR through a purchase using a variety of funding sources.
      • Full assessed taxes are paid with the exception of the state education tax.
      • All statements for a county are compiled and forwarded annually to the Department of Treasury by Dec. 15.
      • The state treasurer forwards payment in the amount of the assessment to each affected assessing district in a county by Feb. 14 each year.
      • Assessments for local school districts, intermediate school districts, and community colleges are paid from the School Aid Fund.
      • PILT on lands purchased using the Michigan Natural Resources Trust Fund are paid entirely with Trust Fund dollars.
      • All other payments are made from 50% General Fund and 50% restricted funds (for example, the Game and Fish Protection Fund and the Waterways Fund).
      • Payments not made in full to the local assessing districts (any delinquent amounts) will be subject to penalty and interest.
    • Commercial Forest Act
      • Private lands enrolled in the Commercial Forest Act are not subject to ad valorem general property tax.
      • Land enrolled in this program is required to have a forest management plan that includes active management and must be open for non-motorized public use for hunting, fishing and trapping.
      • Private landowners are subject to an annual specific tax of $1.30/acre
      • This rate increases $0.05 per acre every five years beginning in 2012. The next increase is scheduled for 2022.
      • The state pays PILT that matches the annual tax rate of the private landowners, so currently PILT on these lands is $1.30/acre.
      • Department of Treasury issues these payments annually by Dec.1 each year to the county treasurers.
      • County treasurers then distribute the funds to each township, as appropriate.
      • This PILT payment is issued from the General Fund.