Personal Property Tax PA 328
The Lansing Economic Development Corporation (LEDC) offers assistance in application for Personal Property Tax Public Act 328 of 1998 which allows the exemption of all state and local millage. The length of abatement is negotiable and is accomplished via adoption of a resolution by City Council, subject to final approval by the State Tax Commission (STC). A 328 exemption includes only new personal property not previously subject to property taxes in any other jurisdiction in Michigan. This includes personal property tax already in Michigan, but exempt for another reason (for example, property that is receiving a P.A. 198 abatement).
The exemption is not project-specific and would exempt all new personal property installed by the business for the time specified by the local unit of government.
Who Is Eligible to Apply?
Eligible businesses include: manufacturing, mining, research and development, wholesale trade and office operations. Retail businesses and casinos are not eligible. The personal property must be located in an eligible local assessing district, which contains an eligible distressed area.
How Does It Work?
The City of Lansing may, by resolution, exempt new personal property for an eligible business in any of the following areas:
• Industrial Development District (PA 198) – Must be an Industrial Development District, not a Plant Rehabilitation District.
• Renaissance Zone
• Enterprise Zone
• Brownfield Redevelopment District
• Empowerment Zone
• Tax Increment Financing District
• Local Development Financing District
• Downtown Development District
What Is the Process?
1. An eligible business submits an application (Michigan Department of Treasury form 3427) to the Lansing Economic Development Corporation (LEDC). Before processing the application, the LEDC must determine if the project is in an eligible district. If not, a district will need to be established.
2. The City Council adopts a resolution which provides for the exemption and specifies the length of the abatement for the new personal property tax. There is no maximum or minimum number of years. The abatement for the personal property tax includes both the local millage levied and the state education tax.
3. The State Treasurer, with written concurrence of the LEDC, advises the State Tax Commission as to whether exempting the new personal property of the eligible business is necessary to:
• Reduce unemployment.
• Promote economic growth.
• Increase capital investment in the state.
4. The State Tax Commission approves or disapproves the application
Why Offer Personal Property Tax Abatements?
Personal property tax relief allows a distressed area in the City to:
• Promote economic development.
• Preserve current local tax base and provide for future tax revenue increases.
• Target the type of businesses they may want to attract.
• Compete for jobs with other states and countries that have lower personal property taxes or none at all.
