Sec. 9m.
(1) Beginning December 31, 2015 and each year thereafter, qualified new personal property for which an exemption has been properly claimed under subsection (2) is exempt from the collection of taxes under this act.
(2) A person shall claim the exemption under this section by filing an affidavit with the assessor of the township or city in which the qualified new personal property is located as provided in subsection (3). The affidavit shall be in a form prescribed by the state tax commission. An affidavit claiming an exemption under this section applies to all existing and subsequently acquired qualified new personal property. The assessor of the township or city shall annually transmit the affidavits filed, or the information contained in the affidavits filed, under this section, and other parcel information required by the department of treasury, to the department of treasury in the form and in the manner prescribed by the department of treasury no later than April 1. A person claiming an exemption under this section shall rescind the claim of exemption by December 31 of the year in which exempted property is no longer eligible for the exemption by filing with the assessor of the township or city a rescission affidavit in a form prescribed by the state tax commission. The assessor of the township or city shall annually transmit the rescission affidavits filed, or the information contained in the rescission affidavits filed, under this section to the department of treasury in the form and in the manner prescribed by the department of treasury no later than April 1.
(3) If a person claiming an exemption under this section has not filed an affidavit under this section in any prior year with the assessor of the township or city in which the qualified new personal property is located, that person shall file the affidavit described under subsection (2) with that assessor not later than February 20 of the first year for which the person is claiming the exemption for qualified new personal property in the township or city in a manner provided by section 7(8) of the state essential services assessment act, 2014 PA 92, MCL 211.1057.
(4) Except for a person claiming an exemption under this section for personal property that was subject to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit claiming the exemption under this section is filed as provided in subsection (3) by February 20, 2016, and the person claiming the exemption under this section complied with section 19(9) in 2015, or if the filing requirement under section 19(9) was not applicable because the qualified new personal property was acquired in 2015, the person claiming the exemption under this section is not required to file a statement under section 19 for that qualified new personal property in 2016. Except for a person claiming an exemption under this section for personal property that was subject to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit claiming the exemption under this section is filed as provided in subsection (3), beginning in 2017, the person claiming the exemption under this section is not required to file a statement under section 19 for qualified new personal property exempt under this section. For a person claiming an exemption under this section for personal property that was subject to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit claiming the exemption under this section is filed as provided in subsection (3) and the person claiming the exemption under this section complied with section 19(9) in 2015, the person claiming the exemption under this section is not required to file a statement under section 19 for that qualified new personal property in the first year for which that person is claiming an exemption under this section or in any subsequent year. For a person claiming an exemption under this section for personal property that was subject to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit claiming the exemption under this section is filed as provided in subsection (3), but the person claiming the exemption under this section did not comply with section 19(9) in 2015, the person claiming the exemption under this section shall file a statement under section 19 for that person's qualified new personal property in the first year for which that person is claiming an exemption under this section for qualified new personal property, but that person is not required to file a statement under section 19 for that qualified new personal property in any subsequent year. If the person claiming the exemption under this section has not filed an affidavit as required under subsection (2), the personal property for which the person is claiming an exemption is subject to the collection of taxes under this act and that person shall file a statement under section 19.
(5) If the assessor of the township or city believes that personal property for which an affidavit claiming an exemption is filed under subsection (2) is not qualified new personal property, the assessor may deny that claim for exemption by notifying the person that filed the affidavit in writing of the reason for the denial and advising the person that the denial may be appealed to the board of review under section 30 or 53b. The assessor may deny a claim for exemption under this subsection for the current year only. If the assessor denies a claim for exemption, the assessor shall remove the exemption of that personal property and amend the tax roll to reflect the denial and the local treasurer shall within 30 days of the date of the denial issue a corrected tax bill for any additional taxes.
(6) A person claiming an exemption for qualified new personal property exempt under this section shall maintain books and records and shall provide access to those books and records as provided in section 22.
(7) If a person fraudulently claims an exemption for personal property under this section, that person is subject to the penalties provided for in section 21(2).
(8) As used in this section:
(a) "Affiliated person" means a sole proprietorship, partnership, limited liability company, corporation, association, flow-through entity, member of a unitary business group, or other entity related to a person claiming an exemption under this section.
(b) "Direct integrated support" means any of the following:
(i) Research and development related to goods produced in industrial processing and conducted in furtherance of that industrial processing.
(ii) Testing and quality control functions related to goods produced in industrial processing and conducted in furtherance of that industrial processing.
(iii) Engineering related to goods produced in industrial processing and conducted in furtherance of that industrial processing.
(iv) Receiving or storing equipment, materials, supplies, parts, or components for industrial processing, or scrap materials or waste resulting from industrial processing, at the industrial processing site or at another site owned or leased by the owner or lessee of the industrial processing site.
(v) Storing of finished goods inventory if the inventory was produced by a business engaged primarily in industrial processing and if the inventory is stored either at the site where it was produced or at another site owned or leased by the business that produced the inventory.
(vi) Sorting, distributing, or sequencing functions that optimize transportation and just-in-time inventory management and material handling for inputs to industrial processing.
(c) "Eligible manufacturing personal property" means all personal property located on occupied real property if that personal property is predominantly used in industrial processing or direct integrated support, except that for personal property that is construction in progress and part of a new facility not in operation, eligible manufacturing personal property means all personal property that is part of that new facility if that personal property will be predominantly used in industrial processing when the facility becomes operational. Personal property that is not owned, leased, or used by the person who owns or leases occupied real property where the personal property is located is not eligible manufacturing personal property, unless the personal property is located on the occupied real property to carry on a current on-site business activity. Personal property that is placed on occupied real property solely to qualify the personal property for an exemption under this section or section 9n is not eligible manufacturing personal property. Personal property located on occupied real property is predominantly used in industrial processing or direct integrated support if the result of the following calculation is more than 50%:
(i) Multiply the original cost of all personal property that is subject to the collection of taxes under this act and all personal property that is exempt from the collection of taxes under sections 7k, 9b, 9f, 9n, and 9o and this section that is located on that occupied real property and that is not construction in progress by its percentage of use in industrial processing or in direct integrated support. Personal property is used in industrial processing if it is not used to generate, transmit, or distribute electricity for sale, if it is not utility personal property as described in section 34c(3)(e), and if its purchase or use by the person claiming the exemption would be eligible for exemption under section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t, or section 4o of the use tax act, 1937 PA 94, MCL 205.94o. For an item of personal property that is used in industrial processing, its percentage of use in industrial processing shall equal the percentage of the exemption the property would be eligible for under section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t, or section 4o of the use tax act, 1937 PA 94, MCL 205.94o. Utility personal property as described in section 34c(3)(e) is not used in direct integrated support.
(ii) Divide the result of the calculation under subparagraph (i) by the total original cost of all personal property that is subject to the collection of taxes under this act and all personal property that is exempt from the collection of taxes under sections 7k, 9b, 9f, 9n, and 9o and this section that is located on that occupied real property and that is not construction in progress.
(d) "Industrial processing" means that term as defined in section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t, or section 4o of the use tax act, 1937 PA 94, MCL 205.94o. Industrial processing does not include the generation, transmission, or distribution of electricity for sale.
(e) "New personal property" means property that was initially placed in service in this state or outside of this state after December 31, 2012 or that was construction in progress on or after December 31, 2012 that had not been placed in service in this state or outside of this state before 2013.
(f) "Occupied real property" means all of the following:
(i) A parcel of real property that is entirely owned, leased, or otherwise occupied by a person claiming an exemption under this section or under section 9n.
(ii) Contiguous parcels of real property that are entirely owned, leased, or otherwise occupied by a person claiming an exemption under this section or under section 9n and that host a single, integrated business operation engaged primarily in industrial processing, direct integrated support, or both. A business operation is not engaged primarily in industrial processing, direct integrated support, or both if it engages in significant business activities that are not directly related to industrial processing or direct integrated support.
(iii) The portion of a parcel of real property that is owned, leased, or otherwise occupied by a person claiming the exemption under this section or under section 9n or by an affiliated person.
(g) "Original cost" means the fair market value of personal property at the time of acquisition by the first owner. There is a rebuttable presumption that the acquisition price paid by the first owner for personal property reflects the original cost of that personal property. The state tax commission may provide guidelines for 1 or more of the following circumstances:
(i) Determining original cost of personal property when the actual acquisition price paid by the first owner for personal property is not determinative of the original cost of that personal property.
(ii) Estimating original cost of personal property when the actual acquisition price paid by the first owner for the personal property is unknown.
(iii) Adjusting original cost of personal property when the personal property is idle, is obsolete or has material obsolescence, or is surplus.
(h) "Person" means an individual, partnership, corporation, association, limited liability company, or any other legal entity.
(i) "Qualified new personal property" means property that meets all of the following conditions:
(i) Is eligible manufacturing personal property.
(ii) Is new personal property.
History: Add. 2012, Act 401, Eff. Mar. 28, 2013 ;-- Am. 2013, Act 154, Imd. Eff. Nov. 5, 2013 ;-- Am. 2014, Act 87, Imd. Eff. Apr. 1, 2014 ;-- Am. 2015, Act 119, Imd. Eff. July 10, 2015
Last modified: October 10, 2016