Business equipment tax repeal bills sail through state House

Mar 25, 2014

A widely unpopular tax on business equipment in Michigan is one step closer to being permanently repealed.

Lawmakers on both sides of the aisle say the industrial portion of Michigan’s Personal Property Tax (PPT) is a job killer and keeps companies from investing in new equipment.

“The Personal Property Tax is an onerous one on our businesses and has left many companies that want to upgrade their equipment and be much more efficient both in terms of production and in terms of energy efficiency. They’ve been prevented from doing so under our current law,” said state Rep. Vicki Barnett, D-Farmington Hills.

But the PPT generates money that local governments depend on to provide basic services to residents.  

The state House on Tuesday passed a package of bills seeking to fully compensate communities for any lost revenue. Under the plan, the state would use money from expiring tax credits to help make up for the lost revenue. It would also give local governments a bigger share of the tax it levies on out-of-state purchases.

The bills need to be signed into law by Gov. Rick Snyder and then be approved by Michigan voters in August for the PPT to be permanently repealed.

Local government officials say they plan to work hard to make sure that question passes if it gets on the August ballot.

“This is something that provides tax relief to businesses, but also reimburses local units of government so that we can continue to provide essential services,” said Samantha Harkins with the Michigan Municipal League. “And that’s the message that we’ll really be pushing out as we talk to people in press events and things like that.”

The state Senate must approve some relatively minor changes made in the House before the legislation can go to Gov. Snyder’s desk.