2018 Deadline for Claiming Qualified Eligible Manufacturing Personal Property Exemption is February 20, 2018

Qualified new and used personal property (as defined by MCL 211.9m and 211.9n) is exempt from ad valorem taxation, but the taxpayer must file a timely claim to receive the exemption. To claim this exemption, a fully completed form 5278 must be received by the Assessor of the local unit of government where the qualified personal property is located no later than February 20. Owners of personal property subject to this exemption do not pay the property tax, but pay a much lower Essential Services Assessment. The form is at this site: https://www.michigan.gov/documents/taxes/5278_500796_7.pdf

This is the new personal property exemption that began being phased in two years ago. Briefly, if more than 50% of the personal property on a single occupied real property site (which can include multiple contiguous parcels) is used for either manufacturing or direct integrated support activities then all the personal property on the site (with exceptions for utility property and property used to generate or transmit electricity) is eligible manufacturing personal property (EMPP). EMPP qualifies for the exception if it is either new (in service after December 31, 2012) or old (first placed in service more than 10 years) before the current calendar year. This provides a phase in of the exemption. The exemption for personal property placed in service between 2013 and 2007 phases in through 2023.

If the personal property on the site meets the “more than 50%” test, all the property on that site will be reported on the form 5278. If the property on the site does not meet the exemption test, a standard personal property statement (form 4175) is filed for the personal property on that site and that form is also due on February 20.