February is for lovers, and who doesn’t love a tax exemption? Some Michigan manufacturers who were not able to claim their 2021 ESA-PPT exemption due to COVID-19, have until March 14 to request approval from the State Tax Commission.
Eligible Michigan manufacturers can elect out of the personal property taxes and instead pay an Essential Services Assessment (ESA) at the state level. The ESA is a State specific tax on personal property that is exempt from property taxes at the local level because the property meets certain eligibility requirements, such as being qualified manufacturing or industrial personal property. In order to elect out of local personal property taxes and into the ESA regime, manufacturers must file the required forms with their local assessing office by February 20th of each year.
During calendar year 2021, some manufacturing businesses were not able to file the required paperwork by the due date as a result of COVID-19 restrictions.
On November 14, 2023, the Governor signed 211 PA 2023. As the legislation was not given immediate effect, that law went into effect February 13, 2024. The legislation allows manufacturers who did not elect out of local personal property taxes and into ESA due to the COVID-19 pandemic to retroactively claim eligible manufacturing personal property exemption for 2021.
If you have any questions as to whether your business can claim a retroactive 2021 ESA/PPT exemption, please contact your Paul McCord or your Fraser Trebilcock attorney.
This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.
Fraser 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 pmccord@fraserlawfirm.com.