Background: Effective in 2008, local property tax millage rates and eligibility for MBT credits differ for commercial versus industrial property. The lack of definition of manufacturing property caused the Michigan Department of Treasury to appeal nearly 30,000 business property classifications over the last three years, and may result in more appeals. This has been a tremendous disruption for businesses. Working with state tax administrators, MMA has developed a template for legislation that would solve this confusion and also provide for an appeal of classification determinations by the State Tax Commission, which is currently prohibited. We encourage passage of this legislation to eliminate the uncertainty for business and local governments. This is an immediate step that would improve Michigan’s business climate.

MMA Position: Michigan must establish a clear definition of manufacturing property under the current tax system to avoid the enormous administrative burdens for the agency and taxpayers caused by uncertainty.