Township businesses may be paying exempted tax

Mar. 24, 2014  PLYMOUTH EAGLE.

Curmi: “I want small business to receive their rightful exemptions. I want to make sure business people are not leaving money on the table,”

Plymouth Township officials failed to follow the instructions of the state treasury department regarding new personal property tax exemptions for small businesses last month, calling them “suggestions.

The Personal Property Tax Exemption Bill signed by Gov. Rick Snyder last December provides tax exemptions for personal property in an effort, according to a state spokesperson, to spur economic growth. The new tax rules are supposed to help small business owners and bring more business into the state by offering exemptions for items such as office furniture, computers, shelving, machinery and any property owned or leased by a business that is not considered attached to the land. Known as the “small taxpayers exemption” it is only for commercial and industrial personal property.

Local taxing units were required to give notice, information and instructions about the exemption to business owners in a mailing before Jan. 10. The City of Plymouth and Canton Township, among many others, followed state recommended guidelines. Assessors in most area communities mailed the required “Affidavit of Owner of Eligible Personal Property Claiming Exemption from Collection of Taxes.” and sent the form with the “2014 Personal Property Statement” unlike Plymouth Township, which withheld the owner affidavits from the mailings.

Township Trustee Chuck Curmi spoke at a Feb. 13 board meeting regarding the new exemption after recently returning from a Michigan Townships Association seminar covering the new tax regulations. He suggested that the affidavits should have been mailed with the assessment information to businesses.

Reaume said at the February meeting that he felt it was unnecessary to include the owner affidavits with the personal property statements and described the state guidelines as “a suggestion” and “unclear.” The tax assessments had already been mailed without the affidavits at that time, according to an informed source.

Township Supervisor Richard Reaume said that he was “confident we are within the law” in omitting the affidavits and said that the law “is not as clear at it should have been” regarding the responsibility of the township to provide the affidavits. He also said that the township would “try to be as liberal as possible with the rules” for businesses that missed the exemption.

Of the 11 bills Snyder signed last year affecting the taxation of personal property, most don’t take effect until 2015. This single new personal property exemption of up to $80,000 became effective Dec. 31, 2013 for the 2014 tax year. Under the new law, eligible personal property is exempt from taxation provided it meets certain criteria. Several of the new exemptions and other business tax changes will face a statewide vote in August.

While there is a possibility the exemption might not be approved by voters in the August, 2014 election, or be repealed, the state provided guidelines and calendar dates for municipalities to notify resident taxpayers who might benefit from the exemptions this year.

Plymouth Township business owners who did not receive the required affidavit or did not meet the Feb. 10 deadline for filing that required form could pay an unjustified tax, according to Curmi.

“I want small business to receive their rightful exemptions. I want to make sure business people are not leaving money on the table,” he said.

Curmi said he suspected thousands of small businesses in Plymouth might be affected.

“There are many home-based businesses in the township,” he said.

Failing to file the required affidavit could result in a complete forfeiture of the tax exemption. The invalid taxes collected on personal property would go directly into the general fund of the township and not be shared by other taxing entities, a unique facet of personal property tax.

For instance, if a business owner having personal property with a true cash value of $60,000 failed to file the required Affidavit of Owner of Eligible Personal Property the township assessor would place $30,000 (50 percent of the total) on the tax roll and the business would receive an invoice for approximately $1,400.

According to information posted on the State of Michigan website, taxpayers who failed to file the affidavit by Feb. 10 could file an appeal with the March Board of Review to claim their exemption. However, March 15 was the last scheduled Plymouth Township Board of Review meeting.

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