Michigan s personal property tax t ax relief and ballot question 2014 updated april 30 2014
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Michigan’s Personal Property Tax T ax Relief and Ballot Question 2014 Updated April 30, 2014 PowerPoint PPT Presentation


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Michigan’s Personal Property Tax T ax Relief and Ballot Question 2014 Updated April 30, 2014. The Problem with Business Personal Property Taxes. Personal property tax on machinery and equipment is a costly disincentive to job creation!

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Michigan’s Personal Property Tax T ax Relief and Ballot Question 2014 Updated April 30, 2014

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Michigan s personal property tax t ax relief and ballot question 2014 updated april 30 2014

Michigan’s Personal Property TaxTax Relief and Ballot Question 2014Updated April 30, 2014


The problem with business personal property taxes

The Problem with Business Personal Property Taxes

  • Personal property tax on machinery and equipment is a costly disincentive to job creation!

  • The tax is paid every year (even if sales tax is paid at purchase) and never goes away!

  • Michigan is uncompetitive among great lakes states – particularly for manufacturers:

    • No personal property tax:

      • Illinois

      • New York

      • Pennsylvania

    • Manufacturing equipment exempt:

      • Ohio

      • Minnesota

      • Wisconsin

    • Indiana (much lower rate & full depreciation)

  • It’s a locally administered tax that often results inconsistent treatment, is burdensome to administer, and often results in costly appeals.


Personal property tax reform

Personal Property Tax Reform

  • 2014 Legislation initially targets small business and manufacturers.

    • 2014 small business exemption begins.

    • 2016 relief for manufacturers begins.

    • 100% Reimbursement to local governments.

    • Received overwhelming bi-partisan support.

  • As part of, and in order for the law to go into effect voters must approve August 5, 2014 ballot question allowing revenues to be directed to local governments. If the ballot question fails, all personal property relief will be repealed beginning in 2015.


Personal property tax relief timeline

Personal Property Tax Relief Timeline

Existing manufacturing equipment that is more than 10 years old = exempt!

2014 small business exemption; under $80,000 TCV ($40,000 TV) PER tax jurisdiction!1

Manufacturing equipment purchased in 2013 and after becomes exempt.

All manufacturing equipment = exempt from local taxation.

2014

August 5, 2014

2016

2023

Voters must approve ballot question to simply direct reimbursement to locals. This is NOT a tax increase on Michigan residents or business. However, if the ballot question fails, all personal property relief will be repealed beginning in 2015.

*1 TCV = True Cash Value, TV = Taxable Value


Revenue reimbursement stream to local governments

Revenue Reimbursement Stream to Local Governments

Expired Business Tax Credits = Reserve of $$

Essential Service Assessment (ESA). Calculated to reimburse for costs of Police, Fire, Ambulance, Jails

3-tier rate system, fixed in statute!

Manufacturer’s property , based on age of equipment.

+

X

=

Local Gov’t

Local Community Stabilization Authority; disburses reimbursement to locals

$$

Use Tax Act

Used as delivery mechanism. NO change in tax rate or taxes assessed!

Local Gov’t

$$

$$

Local Gov’t

$$

Providing the reimbursement requires voter approval to “deliver” the expired business tax credit reserves and ESA revenue to local governments. This is not a tax increase; residents and business will see NO change in tax rate or tax liability.


Essential services assessment what is it who pays it

Essential Services Assessment What is it? Who Pays it?

Manufacturers with more than $80,000 TCV of property who take personal property tax relief from the local level will pay a small “essential services assessment” in order to provide revenue reimbursement for the costs of police, fire, ambulance, jail services.

This will be a fixed, statewide rate, with one single form to submit to the state = far more simple for business to comply with compared with the current system, and represents a significant tax savings for some of our state’s largest employers. Despite the ESA, the plan is still a net 80% reduction for manufacturers!


Personal property tax reimbursement to locals need voter approval

Personal Property Tax& Reimbursement to Locals: NEED VOTER APPROVAL

As part of, and in order for the law to go into effect voters must approve August 2014 ballot question allowing revenues to be directed to local governments. If the ballot question fails, all personal property relief will be repealed beginning 2015.


August 2014 ballot question

August 2014 Ballot Question

proposal 14-1

approval or disapproval of amendatory act to

reduce state use tax and replace with A local community stabilization share TO modernIZE the tax system to help small businesses GROW AND CREATE JOBS

The amendatory act adopted by the Legislature would:

  • Reduce the state use tax and replace with a local community stabilization share of the tax for the purpose of modernizing the tax system to help small businesses grow and create jobs in Michigan.

  • Require Local Community Stabilization Authority to provide revenue to local governments dedicated for local purposes, including police safety, fire protection, and ambulance emergency services.

  • Increase portion of state use tax dedicated for aid to local school districts.

  • Prohibit Authority from increasing taxes.

  • Prohibit total use tax rate from exceeding existing constitutional 6% limitation.

  • Should this law be approved?

    YES _X_

    NO ____


Michigan citizens for strong and safe communities strongandsafecommunities com

Michigan Citizens for Strong and Safe Communitiesstrongandsafecommunities.com

Business Groups

  • Michigan Chamber of Commerce

  • Michigan Manufacturers Association

  • Grand Rapids Area Chamber of Commerce

  • Detroit Regional Chamber

  • Lansing Regional Chamber of Commerce

  • Small Business Association of Michigan

  • National Federation of Independent Business-Michigan

  • Business Leaders for Michigan

  • Michigan Grocers Association

  • Home Builders Association of Michigan

  • Michigan Association of Realtors

  • Michigan Retailers Association

  • Michigan Soft Drink Association

  • Associated Builders and Contractors of Michigan

  • Michigan Business Professionals Association

  • And more!

.


Michigan citizens for strong and safe communities website here

Michigan Citizens for Strong and Safe Communitieswebsite here

Local Government, Public Safety, and Education

  • Michigan Municipal League

  • Michigan Association of Counties

  • Michigan Townships Association

  • Michigan Libraries Association

  • Michigan Sheriffs’ Association

  • Michigan Association of Chiefs of Police

  • Michigan Association of Police Organizations

  • Fraternal Order of Police

  • Michigan Association of Fire Chiefs

  • Police Officers Association of Michigan

  • Michigan Professional Fire Fighters Union

  • Michigan Association of School Boards

  • Michigan Association of Intermediate School Administrators

  • Michigan Community College Association


Michigan citizens for strong and safe communities

Michigan Citizens for Strong and Safe Communities

Even with this strong support, WE NEED YOUR HELP

The biggest challenge: general public is not familiar with PPT!

Folks who are unaware or confused, tend to vote No.

For more information, please contact the Michigan Chamber of Commerce at michamber.com and/or sign up to join the Coalition of get updates! strongandsafecommunities.com

Paid for with regulated funds by Michigan Chamber PAC II, 600 S. Walnut Street, Lansing, MI 48933.


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