News from Lansing: Business Personal Property Tax Returns

  • February 19, 2013
  • Steve Wisinski, CPA, MAFF

Given the looming personal property tax due date of Feb 20, business owners should be aware of a bill signed by Michigan Gov. Snyder on December 20, 2012.  This bill eliminates the personal property tax for small taxpayers starting in 2014 (commercial and industrial property with a combined taxable value less than $40,000 in the local taxing unit) and phases out the tax on manufacturing personal property beginning in 2016 through 2023. Note that this bill only affects small taxpayers and manufacturing personal property – All others will continue to be assessed a personal property tax.

The local governments are authorized to levy a special assessment beginning 1/1/16 on all industrial real and commercial property located in that governmental unit to replace 100% of the lost personal property tax revenue that funded essential services (police, fire, etc.) only.  This assessment would not apply to small taxpayers.

Revenue from expiring business tax credits would be used to reimburse local governments for a portion of the revenue loss associated with the changes in the PPT.  In addition, a portion of the 6% Michigan use tax would be redirected to a new “Metropolitan Areas Metropolitan Authority” and these funds would also be used to reimburse certain localities.

A caveat here is that the public must support the reallocation of use tax revenue for this purpose (August 2014 vote).  If this vote fails, the exemptions for personal property used in manufacturing would not go into effect and the small taxpayer exemption would be repealed.