To the Journal editor:

In a recent letter to the editor, the author opined about taxation on personal property. Here is some information.

All Americans once paid a personal property tax on their belongings. Currently, under the Michigan law of the General Property Tax Act 206 of 1893, individuals pay property taxes on their real estate (real property tax or “ad valorem” meaning based on the value).

Michigan businesses pay an additional tax on property that can be touched and moved, from staplers to desk chairs to manufacturing equipment (personal property tax). When the item was purchased, Michigan sales tax was added but the PPT is an additional annual tax on the item.

Determining the value for the PPT is based on formulas and the date the item is put into service. Numerous items such as computer software are generally exempt.

Also, business motor vehicles and trailers registered with the secretary of state are exempt. Inventory, supplies and products for retail or wholesale are exempt as well as some machinery.

As of December 2022, the current tax exemption threshold is $180,000 for business personal property, up from $80,000 in 2014. Accountants can calculate this based on inventory the business provides, and they can complete the necessary forms for the business.

The current intention is for the tax to be phased out by 2024 and replaced with a corporate income tax, all of which is to make Michigan more appealing to business.

Local municipalities have the power to tax through millage or assessment, separate from the state, and this is typically done through a ballot question, such as a fire department, road or library millage.

However, the local millage/assessment applies to all property owners (residents and businesses).

Municipalities can levy some taxes, without requesting input from residents through the ballot.

Sincerely,