Currently in Michigan, all businesses must pay a personal property tax on every piece of equipment they own. Not only do small businesses pay the six percent sales tax when they purchase equipment, they also pay a tax for every year that they own the equipment. The tax is unique to Michigan and has put the state at an economic disadvantage when competing for new businesses and jobs. This proposal would immediately eliminate the personal property tax on small businesses, and phase it out over nine years for larger businesses.
The referendum, on August 5, 2014 ballot, is not a tax increase. It is paid for by eliminating special corporate tax breaks the legislature has voted to end, and by establishing a statewide Essential Services Assessment paid only by manufacturers receiving a Personal Property Tax reduction.
For more information on the tax or Proposal 1, visit www.strongandsafecommunities.com.