For purposes of Michigan property taxes, qualified manufacturing personal property (as defined by MCL 211.9m and 211.9n) located on occupied real property is exempt from ad valorem taxation and, rather, is subject to a much lower Essential Services Assessment. To claim this exemption, a fully completed Form 5278must be received by the Assessor for the local unit of government where the qualified personal property is located no later than February 20 (February 21, 2017 this year, due to a holiday). The application form can be accessed at: https://www.michigan.gov/documents/taxes/5278_500796_7.pdf
If more than 50% of the personal property on a single occupied real property site is use for either manufacturing or direct integrated support activities, then all the personal property on the site is eligible manufacturing personal property. One exception is that utility property and property used to generate or transmit electricity is not EMPP and it is excluded from the 50% calculation.
Eligible manufacturing personal property qualifies for the exemption based on when it was placed in service. The exemption for personal property placed in service between 2013 and 2007 phases in, starting last year, and ends in 2023 when the exemption will apply to all eligible manufacturing personal property regardless of when purchased.
If a taxpayer’s exemption claim is denied by the local assessor, the taxpayer has 35 days to appeal to the Tax Tribunal.
If a property taxpayer’s personal property at a particular Michigan location does not qualify for the new Eligible Manufacturing Personal Property Exemption (EMPP - - see prior posts on this topic), the standard personal property statement Form 4175 must still be filed. The annual deadline for that filing under current law is February 20 (February 21, 2017 this year, due to a holiday).
As described in a previous post, all personal property at one location is either EMPP or none of it is EMPP, depending on the property’s predominant use, or “the more than 50%” test. For all the property at one location, you will file either a Form 5278 claiming the exemption, or a standard personal property statement, Form 4175.
Failure to file Form 4175 can result in an estimated assessment and it may limit your appeal rights by requiring you to appeal any estimated assessment to the local board of review as a prerequisite to further appeal.