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Contact Information:
Edward S. Kisscorni, CPA
290 Suncrest Court, SW
Grandville, MI 49418

Office: 616/233-0667
Cell: 616/443-6730
Fax: 616/233-0667

Blog: www.EdKisscorni.com/Blog1
Email: Ed@EdKisscorni.com
 



 



 

 Blog 
Wednesday, November 13 2013

Changes Made to Exemption Provided to Owners of Industrial or Commercial Personal Property

Public Act 153 of 2013, effective November 5, 2013, enacts various cleanup amendments to Michigan personal property tax exemption provisions which have previously been enacted. The changes generally apply to the process regarding the exemption provided to owners of industrial or commercial personal property.

An exemption is allowed for personal and industrial personal property owned by a taxpayer in a particular local tax collecting unit if the true cash value of the property is less than $80,000.  The affidavit for claiming the exemption must be filed by February 10 in each tax year. The affidavit must be in the form developed by the State Tax Commission.

"Commercial personal property" and "industrial personal property" refer to property classified as such under Sec. 211.34c, M.C.L., or would be classified as commercial personal property or industrial personal property under Sec. 211.34c were it not for the exemptions provided for qualified new property, qualified previously existing personal property, and eligible personal property.

The property subject to the exemption must be owned by, leased to, or in the possession of the owner or related entity on December 31 of the immediately preceding year.  A "related entity" is a person that directly or indirectly controls, is controlled by, or is under common control with the person claiming the exemption. The terms "control," "controlled by," or "under common control" mean the possession of the power to direct or cause the direction of the management and policies of a related entity directly or indirectly.  There is a rebuttable presumption that control exists if any person directly or indirectly owns, controls, or holds the power to vote directly or by proxy 10% or more of the ownership interest of any other person or has contributed more than 10% of the capital of the other person.  Indirect ownership includes ownership through attribution or through intermediary entities.

If the local assessor believes that the property for which the exemption is claimed is not eligible for the exemption, the assessor may deny the claim for exemption by notifying the taxpayer of the reasons for the denial and advising the taxpayer of the right to appeal the denial to the local board of review.  The local assessor may deny the claim for exemption for the current tax year and any of the three immediately preceding years and require the tax roll to be amended and revised tax notices be sent out reflecting the denial of the exemption.

Personal Property Statement 

The local assessor or supervisor is required to notify personal property owners of the requirement to file a personal property statement.  This notice must include information on the exemptions available for qualified new property, qualified previously existing personal property, and eligible personal property.  The notice must be sent by January 10 of each year. The statement remitted by taxpayers for 2015 must include a schedule of when any personal property listed in the statement will be eligible for exemption as qualified new personal property.

Fraudulent Claim for Exemption

A person who fraudulently claims an exemption for personal property is guilty of a misdemeanor punishable by imprisonment of 30 days to six months and/or a fine of $500 to $2,500.  An assessor must report suspected fraudulent claims to the prosecuting attorney.

Books and Records

A person who files a claim for an exemption of eligible personal property must maintain adequate books and records relating to the description, the date of purchase, lease, or acquisition, the purchase price, lease amount, or value of all industrial or commercial personal property for a period of four years.  The records must be made available to the local assessor, county equalization department, and the Department of Treasury for four years after the exemption is claimed.

A person who files a claim for an exemption of qualified new personal property or qualified previously existing personal property must maintain adequate books and records regarding the description, date of purchase, lease, or acquisition, the purchase price, lease amount, value, customary industrial use, and asset classification grouping, until the property is no longer eligible for exemptions.  The records must be made available to the local assessor, county equalization department, and the Department of Treasury in any year in which the person claims an exemption.

The local assessor is required to retain all affidavits claiming the exemption for personal property for at least four years after completion of the assessment roll.

Board of Review

For eligible personal property exemptions, the local board of review may hear appeals for the current tax year and immediately preceding three tax years.  For qualified new personal property or qualified previously existing property, the board may only hear appeals for the current year.

If the board denies a claim for exemption, the taxpayer may appeal the decision to the Michigan Tax Tribunal. If the board approves the exemption, it must notify the appropriate officials of the affected local governments.

Changes Made to Exemptions for Eligible Manufacturing Personal Property

Public Act 154 of 2013, effective November 5, 2013, enacts changes to the Michigan personal property tax exemption for eligible manufacturing personal property that is qualified new personal property and the exemption for qualified previously existing personal property.

"New personal property" refers to property that was initially placed in service in the state or outside of the state after December 31, 2012.

The legislation removes the requirement that the affidavit for claiming a qualified new personal property exemption or a qualified previously existing personal property exemption be filed with the Department of Treasury.  A person must file an affidavit with the local tax collecting unit by February 10 of the first year in which the person is claiming the exemption.  An affidavit claiming a qualified new personal property exemption applies to all existing qualified new personal property at the time the affidavit was filed as well as any subsequently acquired qualified new personal property.

If the local assessor believes that the property for which the exemptions are claimed is not eligible for the exemptions, the assessor may deny the claim for exemption by notifying the taxpayer of the reasons for the denial and advising the taxpayer of the right to appeal the denial to the local board of review.  The local assessor may deny the claim for exemption for the current tax year only and require the tax roll to be amended and revised tax notices to be sent out reflecting the denial of the exemption.

Taxpayers claiming the exemption for qualified new personal property are required to maintain books and records.  A person fraudulently claiming the qualified new personal property exemption or the qualified previously existing personal property exemption is subject to penalties.

Posted by: Ed Kisscorni AT 01:00 pm   |  Permalink   |  Email

 

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