Understanding Personal Property Tax and the Small Taxpayer Exemption

What is Personal Property? The Michigan General Property Tax Act, Public Act 206, defines personal property as: “(a) All goods, chattels, and effects within this state.”, as well as listing many of the different types of personal property. Personal property is additionally defined as any property that is not real property, and can therefore have many different definitions. For property tax administration purposes, personal property can be thought of as equipment used in commercial and industrial businesses. Examples: cash registers, freezers, shelving, etc. Residential and agricultural personal property is exempt from taxation.

5076 Small Taxpayer Exemption In December 2012, the State of Michigan created an exemption known as the Small Taxpayer Exemption. This program allows business and business personal property owners to exempt their equipment from property taxation if the value of the equipment is under $80,000 True Cash Value after depreciation (40,000 assessed value) per jurisdiction. Property owners need to file a one page form, mailed to them annually by the assessor’s office, by February 20th, in order to qualify for the exemption. The assessor’s office mails out the form with much of the basic information already included in the form.

5076 Small Taxpayer Exemption Form:

NEW FOR 2019 Previously, the form needed to be filed annually. The assessor could not legally grant the exemption without having a form for each year. For the 2019 tax year, the State of Michigan has updated the small taxpayer exemption process. Property owners only need to file one time, instead of annually, to receive the exemption going forward. Taxpayers must inform the assessor when they no longer qualify for the exemption if the value of their equipment exceeds $80,000. The assessor’s office will annually audit each account to determine if the property still qualifies for exemption. As long as the account is estimated to be valued at less than $80,000, the exemption will carry over year to year.

City of Mt. Pleasant’s Efforts to Inform Personal Property Account Owners Mailing the regular itemized statements and the 5076 exemption form to every personal property account on record, and those identified throughout the year. Using yellow paper for the 5076 exemption form, and yellow envelopes listing the deadlines for filing forms on the envelope. Cover letter written by the assessor attached to each 5076 form mailed to owners. Information on the assessor’s website regarding the program. E-mailing downtown business owners regarding filing the form. Information in City Newsletter, Social Media, and Blog regarding the exemption. Information in the Chamber of Commerce Newsletter regarding the exemption.