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Senate Bill 34 Proposed Eliminating Personal Property Taxes

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Ronald D. Richards Jr.
Foster Swift Municipal Law News
October 2011

This one-sentence bill would exempt all personal property (generally speaking, property not affixed to a structure, like machinery, equipment, and furniture) from tax collection under the General Property Tax Act. Senate Bill (SB) 34 was introduced on 1-19-11, and on the same day referred to the Senate Finance Committee. The Committee has held hearings on the SB, but no further action has been taken. We are advised that the Committee plans multiple hearings, and that the SB’s sponsor would like to find a replacement for local municipalities and schools, who will lose about $1B in revenue under SB 34.

Many municipalities rely heavily on personal property taxes for operating purposes. The Senate Fiscal Agency has estimated that personal property taxes totaled $1.3 billion in 2010. There is no replacement revenue in SB 34 at this time. The Michigan Chamber of Commerce has testified in favor of SB 34. The Michigan Municipal League and Michigan Townships Association have both opposed SB 34 as is - noting deleting personal property taxes without replacement revenue would have a devastating impact on communities and residents.

If you have questions about SB 34, please contact Ronald Richards at 517-371-8154 or rrichards@fosterswift.com.