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New Michigan Exemptions May Offer Tax Savings

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John R. Taylor II
Foster Swift Business & Corporate Law Report
December 18, 2013

There have been several recent tax changes to Michigan tax law. New exemptions may be valuable to you. Consult a tax professional for advice as to how to make the most of available tax benefits.

Sales Tax Exemption for Vehicle Trade-Ins

Beginning Dec. 15, 2013, up to $2,000 of the value of a motor vehicle or recreational vehicle traded-in to pay for a new or used motor or recreational vehicle may be exempt from sales tax. The agreed-upon value must be separately stated. Starting Jan. 1, 2015, the exemption limit is increased by an additional $500 per year.

Use Tax Exemption for Vehicle Trade-Ins

Also starting Dec. 15, 2013, up to $2,000 of the value of a motor vehicle or recreational vehicle traded-in to pay for a new or used motor or recreational vehicle may be exempt from use tax.

Exemption for Industrial/Commercial Personal Property

Beginning Dec. 31, 2013, the commercial and industrial personal property exemption under MCL ยง 211.90 has increased from $40,000 to $80,000. Taxpayers who own property in a tax collecting with a combined value of less than $80,000 qualify for the exemption. The filing requirements for this exemption have also been changed.

Qualified Manufacturing Property Exemption

The definition of eligible property has been expanded to include property originally placed in service in Michigan or outside the state after Dec. 31, 2012. This exemption can be applied to existing personal property and to new personal property. Filing requirements have also changed. While many of these exemptions do not take effect until 2015, these changes may be important to your long-term tax planning strategy.

For more information about how these exemptions may affect you, contact a Foster Swift tax attorney.