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Increase in the Small Business Property Tax Exemption

Eligibility for the so-called “Small Business Property Tax Exemption” has expanded. Generally, all personal property used by businesses in Michigan is subject to property taxation. Beginning with calendar year 2014, however, an exemption was created for the personal property owned by businesses if the “True Cash Value” or, in other words, market value of their personal property either owned, leased, or possessed by a related party is less than $80,000 within any city or township. This exemption has become known as the “Small Business” exemption.

The exemption is only for commercial and industrial personal property (residential/individuals are not subject to personal property taxes). Legislation passed last October 2023, expands the exemption by increasing the eligibility limit to from the $80,000 true cash value limit to $180,000.

In order to claim the exemption, eligible small businesses must file a Form 507 no later than February 20, 2024, with their local assessor. Late filed claims are not accepted. Once filed, and if granted, the exemption will remain as long as the small business still qualifies. In other words, there is no need to file an exemption claim every year.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Headshot of Fraser Trebilcock attorney Paul V. McCordFraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or