For Local Communities
The problem for local communities
Michigan communities have struggled for years to pay for essential services like police, fire, ambulances, schools, roads and jails. Communities also battle for annual legislative appropriations in Lansing to fund other services, including roads and libraries, through revenue sharing.
How it's collected
Currently, the personal property tax is collected by local municipalities according to local millage rates. This means businesses with multiple locations in multiple jurisdictions pay multiple personal property tax bills at varying rates. For some smaller municipalities, the cost of assessing and collecting this tax is almost more than they collect.
For Small Businesses and Manufacturers
Double-taxing small businesses
For decades, Michigan has unfairly double-taxed small businesses with a business equipment tax – known as the personal property tax – on all equipment. Most neighboring states don’t tax business equipment at all, which makes Michigan much less competitive when it comes to creating jobs and attracting business investment.
A tax that never goes away
Each year, equipment is assessed a taxable value and the owner pays a tax based on the local millage rate. In addition to the 6 percent sales tax paid for most items purchased or sold in Michigan, small businesses pay additional personal property taxes on that equipment every single year just for owning it – that tax never goes away, no matter how old the equipment is.
An antiquated, obsolete tax
This antiquated, double-tax has been on the books since the 1800s. Other states in our region have eliminated these antiquated taxes or have dramatically lowered rates, making it difficult for Michigan to compete.
This tax limits investment
Only businesses, including small businesses, pay personal property taxes on their equipment. Taxes on business capital are considered by economists to limit investment, making Michigan less competitive than other states.
Reforming this tax will create jobs and increase investment
Eliminating the Personal Property Tax will create up to 15,000 jobs and $450 million in additional investment. In fact, no other state in our region taxes business equipment the way Michigan does – and no state except one in our region taxes it at all, which puts Michigan at a competitive disadvantage when it comes to job creation and business investment.