Personal Property Tax Reform was passed in Michigan during 2014 and established a seven-year phase-in for changes to personal property taxation on eligible manufacturing personal property in Michigan. It also established a new Essential Services Assessment (ESA) which will be due August 15, 2016, for the first time.
With the arrival of 2016, we are now at the first year of the phase-in for both the Eligible Manufacturing Personal Property exemptions from Personal Property Tax and the new ESA.
Eligible manufacturers need to file Form 5278 by February 22, 2016, to claim the exemption. The form will not be mailed to taxpayers; access the form on the State of Michigan website, www.michigan.gov/esa. Form 5278 is new and significantly different from the personal property tax form for commercial taxpayers or small businesses. A qualifying manufacturer will have both PPT and ESA payments due each year through the phase-in periods.
Michigan now has three Personal Property Tax forms, and taxpayers need to file the correct version for their business:
- Form 5076 – Small businesses with less than $80,000 in personal property
- Form 632 – Commercial and non-qualified industrial businesses
- Form 5278 – Industrial businesses with Eligible Manufacturing Personal Property
Learn more about Personal Property Tax Changes for Manufacturers on our website or contact your Yeo & Yeo professional for more details.