Officials leading the charge in the Snyder Administration and the Legislature expect that long-anticipated legislation to eliminate, reduce, or somehow reform Michigan’s personal property tax should be released before the House and Senate leave Lansing for Spring Break.
Of the three categories of personal property tax, commercial, industrial, and utility, debate has focused on commercial and industrial. Industrial personal property tax is likely to be addressed first, followed by commercial. The utility category is likely not to be addressed at all. Those close to the issue, such as Lt. Governor Brian Calley, have alluded to an expected phase-out of the taxes over several years – using new revenue from current business tax credits that are being phased-out over time.
The challenge facing policymakers is determining the appropriate balance of maximizing the replacement of revenue heading to local units of government, while eliminating or phasing-out the much-maligned personal property tax. Pressure from local units that rely on the associated revenue has slowed the pace of reform as different formulas for reimbursing the locals are examined.