Personal Property Tax Changes on the Move

Date: March 16, 2014

NFIB supported legislation that will change the Personal
Property Tax in Michigan is expected to be reported out of the House Tax Policy
Committee this week. The bills have already passed the Senate.

The bills include changes to the legislation passed in 2012
that will reimburse all local governments for all loss of income from the
Personal Property Tax reforms.

Moving forward on reforming a tax that creates a great
disincentive for business to invest in capital and equipment is a top
priority for NFIB this session. Combined with the recent move away from
the Michigan Business Tax to the new Corporate Income Tax, reducing the
Personal Property Tax will give our state a powerful one-two punch in the
competition for jobs.

All of the Personal Property Tax reform bills in the
legislation passed in 2012 were tie-barred to voter approval at the August 2014
election, if voters reject the proposal, then the entire Personal Property Tax
reform fails and we have to start over. The changes will ensure local
government support for the ballot proposal.

The Personal Property Tax is a levy on equipment, furniture,
tools, computers etc. used by a business in their operations. While both
businesses and individuals pay real property taxes, in Michigan, only
businesses pay the personal property tax (PPT). Many states that compete with
Michigan for jobs have eliminated their Personal Property Tax.  It is
estimated that 80 percent of small businesses would be exempted from the
Personal Property Tax entirely and would not have to file at all under the
$80,000 exemption.

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