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Michigan reforms business property tax exemption for 2014

Effective this year, Michigan law allows for a personal property tax exemption for eligible property owners who own a parcel with a combined true cash value of less than $80,000 in certain distressed communities. Bulletin 11 of 2013, issued by the Michigan Department of Treasury, increased the exemption from $40,000 to twice that amount beginning this year. A distressed community is legislatively defined as "cities, villages and townships which exhibit higher than statewide average levels of economic distress." Currently areas in 136 cities, 31 townships and 15 villages are considered an Eligible Distressed Area, according to the Michigan State Housing Development Authority.

The local unit of government determines the eligibility and length of the property tax exemption for an eligible business, but the state's Property Services Division and the State Tax Commission may review all local decisions. All exemption determinations must be approved by the State Treasurer before becoming final.

Purpose of the law

The New Personal Property Tax Exemption, Public Act 328 of 1998, as currently amended, was created to bring a better business environment to certain distressed areas of the state. The main intended beneficiaries of the new law are manufacturers, mining companies, wholesalers and research and development operations. A distressed parcel is real estate in a qualified Downtown Revitalization District, which is "blighted or functionally obsolete" or a previously occupied building now vacant, which is also in an area zoned for mixed use.

Eligibility requirements

The local government must first adopt a resolution providing for an exemption before any business is eligible to receive a property tax exemption. The eligible real estate must be owned or leased by a new business; existing property already on Michigan's tax rolls cannot receive an exemption

In order to receive the exemption, the owner of the eligible personal property must annually file an affidavit (Form 5076). This affidavit is due by February 10, although in 2014 businesses that miss the deadline may file an appeal to the March Board of Review. Once the owner files Form 5076 no personal personal property tax statement must be filed in that tax year.

Exemptions can make a difference

It is in the state and local community's best interest to improve on blighted or economically distressed areas of the state. That is why Michigan allows for a 100 percent property tax exemption for certain businesses in order that they may operate at lower costs to improve upon otherwise non-functional areas.

Business owners who may be eligible for the amended personal property tax exemption should speak with an experienced Michigan property tax attorney to discuss their application and next steps.




Representative Clients:


IBM Corp.; Comerica Bank; Standard Federal Bank; Hughes Electronics; Toll Brothers, Inc.; Detroit Edison; Cargill Corporation; Detroit Lions, Inc.' Pep Boys; Hilton Hotels, Corporation.

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Hoffert & Associates, P.C.
32255 Northwestern Highway, Suite 205
Farmington Hills, MI 48334
Phone: 248-702-6100
Fax: 248-702-6101
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  Hoffert & Associates

Located in Farmington Hills, Hoffert & Associates, P.C., represents clients throughout Michigan, in cities including: Traverse City, Grand Rapids,

Lansing, Ann Arbor, Detroit, Kalamazoo, Portage, Dearborn, Troy, Warren, West Bloomfield, Novi, Birmingham, Northfield, Brighton, Jackson, Battle Creek,

Flint and Saginaw. Our firm also represents clients in Oakland County, Wayne County, Macomb County,

Washtenaw County, Livingston County and Grand Traverse County.