Since the passage of the new Michigan Business Tax, many in the heavy construction industry have asked whether their construction equipment should be classified as industrial or commercial for purposes of personal property taxes and credits.
The State Tax Commission recently provided some clarification in this area. Click here to download a copy of the bulletin. The bulletin emphasized that the new law does not change the definitions of industrial and commercial property.
All machinery and equipment, furniture and fixtures on industrial property is considered industrial personal property. If the total usage of a parcel includes more than one classification, the assessor shall determine the classification that most significantly influences the total valuation of the parcel.
The bulletin went on to say industrial real property includes parcels used for removal or processing of gravel, stone or mineral ores. Classification of personal property as industrial personal property will result in a 65% reduction from the current personal property tax liability, while classification of personal property as commercial personal property will result in an average 23% reduction from current tax liability.
Please review the State Tax Commission bulletin for complete details.
If you have any questions please contact Mike Nystrom, Vice President of Government and Public Relations at mikenystrom@mi-ita.com; or Keith Ledbetter, Director of Legislative Affairs at keithledbetter@mi-ita.com; or by calling the MITA office at (517) 347-8336.
