Michigan Personal Property Tax: What Is It?

Are you familiar with Proposal 1 which will be on the primary ballot August 5th? Unless you are a business owner or a manufacturer, chances are you are not. Like all statewide ballot issues, this is an important vote that will impact businesses and local governments across Monroe County and our State.

Proposal 1 is the only statewide ballot question you will see. However, it is one of the more important proposals that have been on the ballot in recent years. This proposal focuses on
Michigan’s Personal Property Tax (PPT), which has been collected since the 1800’s. Every year, small businesses and manufacturers pay tax on items for their business including office equipment, furniture and machinery. The tax paid is sent to the state treasury and then allocated back to our local communities to pay for essential public services including public safety.  This outdated tax leaves Michigan businesses and manufacturers, including those in Monroe County at a competitive disadvantage as they are double taxed by paying the PPT as well as the 6% sales tax on equipment purchases. This tax is a challenge for current business owners, but it also hurts our ability to recruit new businesses to our communities because it is cheaper to settle in a less costly location. As an example the State of Ohio has no PPT and we are left at a competitive disadvantage when seeking to provide employment opportunities for our citizens through an expanded employer base.

Many voters want to know how local governments will make up this lost revenue that is used to pay for essential public safety services for police, fire and jails, etc. The proposal would make up the lost revenue by paying for it with a portion of the “Use Tax” (an existing tax). There is no new tax or a shift in taxes for citizens. 100% of the money lost by local communities would be replaced by the more stable State Use Tax. This ensures local services our citizens depend on are not subject to uncertainty and politics of state budgeting. The proposal would further be paid for by eliminating special corporate tax breaks as they expire and an Essential Services Assessment paid only by manufacturers receiving a PPT tax reduction.

We urged Monroe County voters to support Proposal 1 to end the PPT. As the income gap widens in our country, Michigan and Monroe County needs to strategically position our
communities to be attractive and competitive to recruit manufacturing and businesses that provided good paying jobs for our citizens. We have much to offer with our skilled workforce and quality of life. Help Monroe County be a place where some of the estimated 15,000 jobs and $450 million in economic development will call home. Vote YES on Proposal 1 on August 5.

 

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102 E. Front St.
Monroe, Michigan 48161
Phone: 734-241-8081
Email: bdc@monroecountybdc.org

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