Local Businesses Urged To Take Advantage Of New Small Business Tax Exemptions
The year 2014 marks the start of a small business tax exemption that economists and fiscal analysts say will bolster the state of Michigan’s job market and puts the state on the right economic track.
“It’s a very important tax reform,” Douglas City Assessor Kelley Ziesemer told Observer Newspapers referring to the Personal Property Tax (PPT) laws signed by Michigan Gov. Rick Snyder in December 2012.
Ziesemer said she particularly wants to make sure that those local small businesses with personal property worth a total of $80,000 or less take advantage of 100% exemption the new tax reform offers.
“There is a mandatory exemption affidavit that has to be filed by February 10,” she said.
That is the date Form 5076 must be returned to the local jurisdiction in which the personal property is located on tax day, which falls on December 31.
The assessor’s office will soon send out the annual Personal Property Tax Statements along with the affidavits.
“Please, please, please return Affidavit 5076 if you quality for the exemption,” Ziesemer wrote, in part, in a letter to Douglas businesses.
“The law does not allow for late filings to amend the valuation or grant the exemption. If the true cash value exceeds $80,000, the tax remains in effect and the Personal Property Statement (Form L-4175) is due February 20, 2014,” Ziesemer stated.
Personal property generally constitutes such items as equipment, furniture, machinery—property not affixed to a structure.
For assessment purposes, it is classified as industrial, commercial and utility. Statewide, personal property consists of a small share of a business’ total taxable value.
As a rule of thumb, the person who prepares a business’ income statements should be able to prepare the personal property statement.
Through a phase-out process, the state will eliminate personal property tax for all Michigan business beginning in 2016. For small taxpayers whose personal property does not exceed $80,000, that exemption starts in 2014.
The manufacturing personal property exemption begins in 2016, with all being exempt by 2017-2023 based on a sliding scale, state officials have announced.
However, the tax exemption law does hinge on voter approval of a tax provision allowing a state tax (Use Tax) to be used to reimburse impacted local municipalities that depend on personal property taxes.
Should voters reject that August 2014 ballot proposal, exemptions that occur in 2014 will remain in effect only for that year.
Ziesemer’s office may be contacted at (269) 857-1438 for questions or further information.