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Subject to voter approval in August 2014 (already passed by legislature in 2012), the phase out of personal property taxes will begin in 2016. By eliminating personal property taxes on property that is 10 years old, as well as new personal property, the personal property tax will be completely eliminated by 2023. If voters approve the measure, a special assessment will be added to real property tax bills starting in 2017 to pay for essential services.

 

Beginning with the 2014 property tax bills, taxpayers whose commercial or industrial personal property had a combined taxable value of less than $40,000 would be exempt from personal property tax. The taxable value for purposes of the Michigan Property Tax Act will be less than the cost of the property due to the personal property tax values decreasing each year the property is owned.

 

The phase out would be accomplished by two new exemptions which would be effective in 2016 property tax bills. First the manufacturing personal property purchased after December 31, 2012. Second the manufacturing property that has been owned for ten years would be exempt from personal property tax. Manufacturing property purchased before 2006 will be exempt from personal property tax on the 2016 bills.

  

Year Equipment Purchased and Prior Years

Property Tax Bill Year Exempt

2012

2023

2011

2022

2010

2021

2009

2020

2008

2019

2007

2018

2006

2017

2005

2016

  

For both the new property and 10 year property exemptions, all property located on an industrial parcel will be exempt if it is used more than 50% in industrial processing or certain support functions.

 

For more information or questions on this topic, please contact your local UHY LLP professional.