Eligible Manufacturing Personal Property Tax Exemption Updates
The State of Michigan has updated the filing requirement for those who qualify for the Eligible Manufacturing Personal Property Tax Exemption (Form 5278). Eligible Manufacturing Personal Property (EMPP) is defined as all personal property located on occupied real property if that personal property is predominately used in industrial processing or direct integrated support.
Beginning in 2024, parcels that received the EMPP exemption in the immediately preceding year carry forward the exemption in each subsequent year until the property becomes ineligible for the exemption. If the EMPP was exempt in the previous assessment year, a Combined Document (Form 5278) no longer needs to be filed for the EMPP to be exempt for the current assessment year. To reiterate, any parcel that received the EMPP exemption in 2023 is exempt in 2024. No Combined Document (Form 5278) should be filed in 2024 for a parcel that received the exemption in 2023.
A Combined Document (Form 5278) should not be filed to report additions or disposals on an EMPP parcel. Taxpayers will report the addition or removal of property from each of their EMPP parcels on their Essential Service Assessment (ESA) Statement filed electronically with the Department of Treasury through the Michigan Treasury Online (MTO) system.
Manufacturers must still file their ESA statement on MTO by August 15, 2024. There is a 3% late penalty for every month ESA is not paid.
Taxpayers are required to report any parcel that no longer qualifies for the EMPP exemption. A parcel may cease to qualify because the property no longer meets the definition of “eligible manufacturing personal property” or because the parcel has no value (e.g., all equipment has been removed, the parcel is subject to an expired IFT certificate, etc.). To report this change, Form 5277 must be filed by February 20, 2024.
For more information, refer to additional guidance related to the 2024 filing requirements from the Michigan Department of Treasury.
If you believe you are eligible for this exemption or have additional questions, please reach out to your tax advisor.