Taxpayers in Michigan may claim, beginning 2016, a property tax exemption for “eligible manufacturing personal property.”
The property tax exemption was enacted in 2012, but subject to voter approval. In 2014, Michigan voters approved the exemption, and thus “activated” the previously enacted exemption for eligible manufacturing personal property (EMPP) effective January 1, 2016.
The exemption for EMPP is actually two exemptions:
All qualified new personal property initially placed in service after 2012 is exempt from property tax beginning in 2016.
Property that meets the definition of “qualified previously existing personal property” is not exempt immediately, but is instead subject to a phased-in exemption. “Qualified previously existing personal property” means personal property that meets both of the following conditions: (1) is EMPP; and (2) was first placed in service inside or outside Michigan more than 10 years before the current calendar year. So, property placed in service before 2006 will become qualified previously existing personal property, and therefore exempt, in 2016.
Property placed in service in 2006 will become exempt qualified previously existing personal property in 2017. All qualified previously existing personal property will be exempt by 2023.
To claim the EMPP exemption, taxpayers must file a Form 5278, Affidavit and Statement for Eligible Manufacturing Personal Property and Essential Services Assessment, no later than February 20, 2016. The form must be filed for each personal property parcel for which the exemption is being claimed.
Read a November 2015 report [PDF 55 KB] prepared by KPMG LLP: Michigan: New Industrial Personal Property Tax Exemption Effective January 1, 2016
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.