Businesses to pay less in school millages
Along with Michigan’s main business tax, property tax rules for businesses also have changed, especially in how personal property is taxed. Some personal property tax reductions have taken effect but won’t be reflected in tax bills until later this year.
Personal property consists of items within a business’ buildings, everything from furniture to computers to factory machinery and even some inventoried products.
Whether those items are counted in assessing business’ property taxes was part of an overall package of bills related to the passage of the Michigan Business Tax, said Martin Marshall, equalization director for Lenawee County.
Industrial personal property is now exempt from up to 24 mills: the 6-mill state education tax and up to 18 mills levied by local school districts for their operating budgets, Marshall said. Commercial personal property is exempt from up to 12 mills levied by schools.
Tax reductions for industrial and commercial personal property will first be reflected in bills received in July. Some commercial personal property owners won’t see that change reflected until December as some schools do not bill until then, Marshall said.
Adrian City Assessor Rick Knapp said the commercial personal property exemption is going to be a “big benefit to our community people in town.”
In regard to the millage rate levied on businesses, Marshall said there would be no change for utility companies’ personal property. According to the Michigan Department of Treasury Web site, however, taxpayers may claim a credit against the MBT equal to 10 percent of some utility personal property taxes.
There are additional MBT credits available based on eligible personal property taxes.
The treasury department’s Web site indicates taxpayers may claim a credit against the MBT:
- Equal to 35 percent of their eligible industrial personal property taxes paid.
- Equal to 23 percent of their eligible state-assessed telephone personal property taxes for the 2008 tax year only. For the 2009 tax year and following tax years, they may claim a credit against the MBT equal to 13.5 percent of the eligible state-assessed telephone personal property taxes.
“The various personal property tax provisions replace the current 15 percent credit for taxes paid on industrial personal property,” according to the treasury department’s Web site.