Skip to comments.Michigan House, Senate OK phasing out tax on business equipment; final votes expected soon
Posted on 12/14/2012 2:10:23 AM PST by equaviator
LANSING, MI - A proposal aimed at eliminating taxes that Michigan manufacturers and some other businesses pay on equipment won final approval from the Legislature early Friday morning.
The plan does not guarantee 100 percent replacement of all revenue for the cities and schools that rely on money from the personal property tax frustrating Democrats and organizations such as the Michigan Municipal League.
Key bills in the package passed the Republican-led House by 57-52 and 56-53 votes late Thursday. The Senate voted early Friday, after which they were sent to Gov. Rick Snyder for his signature.
Phasing out the personal property tax has been a high priority for Republicans. Democrats complained that some details of the plan were not clear as the Legislature raced to approve the bills in the final voting hours of the 2011-12 session.
The proposal could replace some of the reduced taxes in part by devoting a portion of the state's 6 percent "use" tax to a special authority that would send revenues along to communities. A statewide vote, in August 2014, would be needed to approve the change in the use tax. If the vote fails, it would be up to the Legislature to appropriate the money to local taxing units.
Republicans said 80 percent of the lost revenue would be guaranteed for non-essential services. Police, fire and jails would go beyond that and reach 100 percent with a special local assessment. Schools would reach 100 percent if voters approve the change in the use tax.
The plan would phase out the tax on industrial personal property over 10 years. It would wipe out the tax on businesses whose equipment has a taxable value of less than $40,000, eliminating about three-fourths of personal property tax returns that are filed.
Republicans who support eliminating the tax say it is outdated and works against Michigan because it penalizes investments by some businesses.
But local governments and K-12 schools that rely on the personal property tax revenue want to make sure the money they would lose by its repeal is fully replaced.
Interested on how this works. Is this the yearly tax paid on capital equipment? or just Sales tax on purchased capital equipment?
What about depreciation and then recapture of depreciation? You depreciate capital equipment as a tax deduction, but when you sell the equipment you have to recapture some of that depreciation back as taxes.
We in Michigan do not want to waste anymore money in public schools.
>> frustrating Democrats
Michigan sure rocks!! No one can say it’s can’t be done! Seems like more business for Michigan - as they teach the clueless how it is done.
Say Yes to Michigan!
Michigan still has to fix Detroit. When it does that, then it will be an awesome state.
Sometimes you can't fix what is broken or dysfunctional sometimes, they have to hit bottom or worse. The worse in their case is the impending Chapter 9 Bankruptcy which might be a blessing. Tangent to that is the RTW law which means Detwaa would not be tempted to create unsubstainable new ones, their would be competition internally, IMHO they can't stop that.... RTW is a game changer for Detwaa IMHO...
More and more Snyder ( and the Tea Partier's in the Houses ) are saying we are open for business....
“Michigan still has to fix Detroit.”
Bring in idle mining equipment and excavate a dozen holes measuring miles. Fill with water and go walleye fishing.
This creates jobs and gets rid of garbage.
Personal property tax on our shop equipment was one of the reasons we left the state and headed to Indiana back in ‘95. Between that and the ridiculous taxes we were paying on our home at the time it was killing us.
We have such a tax in Tennessee. There is an inventory of the assets kept by date of acquisition and category. By some arcane calculation the value of the assets is annually depreciated and the total is assessed at the going rate.
A return is filed annually where the inventory is adjusted to reflect things gone or added.
I’d say Snyder for President 2016 but Michigan may still need him by then...
What the heck, RICK SNYDER FOR PRESIDENT 2016!
Sanity returning back to MI state government. Conservatives ARE the good guys in white ‘hats’. The other irresponsible sponge cretins rhymes with it.
they are on the right path, now if only Odummy and congress would have done the same 4 years ago or even start now .... ty for the pings excellent intel.
The tax imposed for producing was one of the things Rick Snatorum spoke of that I really liked. The way we tax makers in this country is insane.
We’re going to tax the ore then we’ll tax the refined metal, then we’ll tax the machined part, then we’ll tax the item that part goes on.....
By by Granholm era!!!
Actually there is help on the way for Detroit but it will be tough love and they don’t like it because they won’t have control of the cash. The new international bridge will be good for Detroit whether they like it or not.