Personal property is generally considered to be all property that is not real property and can be easily moved. Some examples include furniture, fixtures, machinery, equipment, leasehold improvements, and equipment leased from others. All personal property located within a jurisdiction on December 31, whether in use or sitting idle must be included on a personal property statement and reported annually to the City. There are three regularly used forms to report personal property. Personal property records are also available for review, but only to the owners and owners’ agents. Confidentiality is required under State law.
Small Business Taxpayer Exemption
There is a complete exemption from personal property taxes for commercial or industrial owners when the combined true cash value of all personal property owned by, leased by or in the possession of the owner or a related entity within the same municipality, is less than $80,000. Michigan form 5076 must be filed annually by February 10 to receive the exemption.
Eligible Manufacturing Personal Property Exemption (EMPP)
To qualify for this exemption, the property must first be located where the predominant use of all personal property is “industrial processing or direct integrated support.” Next, the property has to be qualified new personal property or qualified previously existing personal property. As an example, for tax year 2016, qualified new personal property is defined as property initially placed in service after December 31, 2012 or that was construction in progress on or after December 31, 2012 and placed in service before December 31, 2013. Previously existing property is defined as personal property acquired in 2005 or before. So for 2016, any equipment purchased before 2005 or after 2012 is exempt. In each subsequent assessment year, EMPP which has been in service for more than 10 years also becomes exempt, until 2023 when all EMPP will be exempt. Michigan form 5278 needs to be filed in the Assessor’s Office by February 20 each year.
All other personal property not reported on the two forms described above has to be reported on Michigan form 632 (L-4175) found here. This form is also due on February 20.