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Property Tax Update

December 21, 2015

Michigan Personal Property Tax Exemption

Michigan’s exemption for manufacturing related personal property begins next year and taxpayers should be planning now to take advantage of this important tax benefit. Personal property predominately used for industrial processing or direct integrated support of that processing is eligible for exemption. Qualifying property placed into service after 2012 will become exempt in 2016 and the tax on such property placed into service before 2013 will be phased out over seven years. Property that becomes exempt under this program will be subject to a state special assessment called the State Essential Services Assessment (SESA). Paying the SESA instead of the personal property tax will result in material tax savings, especially for property that is located in jurisdictions with high tax rates.
 
Most taxpayers will be able to determine now whether personal property at a given location will qualify for the exemption. To qualify, over 50% of the original cost of all the personal property at a location must be used for industrial processing or direct integrated support. Most typical manufacturing locations will easily be over the 50% figure. However, those that are close to 50%, may have to wait until all the acquisitions and disposals are complete for the year to make the calculation. 
 
Taxpayers that qualify for the exemption must claim the exemption by filing a Michigan Department of Treasury form 5278 with the local assessor on or before February 20, 2016. If the form is not received by the local assessor on or before February 20, it will be considered not filed. Unlike some other Michigan tax exemptions, the manufacturer's exemption must be timely claimed to take effect. There is no mechanism to account for late-filed claims or provision for retroactive corrections. However, if a claim is not made in a given year, the taxpayer still has the opportunity to file a claim for future years. 

Ohio Property Tax Appeal Deadlines

For Ohio properties, next year will be the 2015 tax year, March 31, 2016 will be the appeal deadline and January 1, 2015 will be the valuation date. While appeals can be filed for all properties, the counties below will have reassessments and those new values will apply to the 2015-2017 tax years (i.e., for taxes imposed during calendar years 2016-2018). 

Allen  Guernsey  Muskingum
Belmont  Highland  Ottawa 
Brown  Huron  Portage 
Coshocton  Jefferson  Sandusky 
Crawford  Lake  Stark 
Cuyahoga  Lorain  Vinton 
Erie  Lucas  Warren 
Fayette  Morgan  Williams  

Honigman is a founding member of the American Property Tax Counsel (APTC), the only organization of law firms that provide major portfolio owners with a single source for all of their property tax reporting and tax reduction needs. APTC covers the United States and Canada and serves clients in every category of real estate, including and by no means limited to office properties, shopping centers, big-box stores, hotels, warehouses and other industrial properties. Working with our local APTC members, we provide property tax representation to clients with properties being reassessed in Ohio, nationwide and in Canada. The local nature of the APTC has benefited innumerable taxpayers, and enables us to be a powerful advocate that can optimize property tax reductions. 

Florida Tax Appeals

For taxpayers with pending appeals in Florida, remember that 2015 Florida property taxes must be paid before they become delinquent on March 31, 2016 in order to proceed with an appeal. Taxpayers have the option of making payment in full or paying 75% of the ad valorem taxes, together with 100% of the non-ad valorem taxes. 
 
Taxpayers who want to avoid the possibility of owing a deficiency plus interest to the taxing unity should pay the full amount due on or before March 31, 2016. If an appeal is successful, the taxpayer will be entitled to a refund. 

Michigan Taxable Values for 2016 will be capped at 0.3%

For 2016, the Proposal A taxable value inflation cap will be 0.3%. Consequently, the taxable value of a parcel that does not transfer or have an “addition” during 2015, may not increase more than 0.3% in 2016. The 0.3% represents the lowest inflation factor since the negative 0.3% in 2010, and the second lowest factor since the inception of Proposal A in 1994.  

Michigan Property Tax Appeal Deadlines

In Michigan, a few jurisdictions will send out assessment notices in January, but most will send them out in February or early March. Depending on the jurisdiction, appeals to assessor boards or local boards of review will be in February or March. For the property of most businesses, the Tax Tribunal’s 2016 appeal deadline will be May 31, 2016.
 
For more information about a possible property tax appeal or any other property tax matter, please call a Honigman property tax professional.