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Personal Property Tax Clean-Up Package Introduced

Posted on May 8, 2015 by Dene Westbrook

A Treasury-backed, six-bill package was introduced earlier this week to make a series of revisions to the recently enacted personal property tax law.  As Treasury ramps up their efforts to implement the new PPT changes approved by the voters last year, they have discovered a number of issues that need to be addressed for the program to function properly.  The proposed changes are embodied within House Bills 4553-4558 and are currently under consideration within the House Tax Policy committee.  The content of the bills focus mainly on definition changes, making date corrections and inserting mechanisms for Treasury to utilize like allowing for audits, creating a rescission process, and providing for refunds. Of main interest to municipalities within the package:

– is an ability for municipalities to utilize mills that were authorized by the voters before 2013 but incurred after 2012 when calculating their debt loss eligible for reimbursement.

– an allowance for a municipality to choose the higher of 2014 or 2015 (subtracted from 2013) for their small taxpayer exemption losses.

– allows an additional year for a municipality to file their essential services budget calculation with the Department and  provides for Treasury to use a default calculation if one is not filed.

– includes date changes that will allow for city reimbursements to begin sooner than expected, possibly as early as fall of 2015.

The House committee took testimony on these bills on Wednesday and is scheduled to bring them back up for a vote next week.  While there is no opposition to the proposed changes, a couple of questions were raised in committee and Treasury is working on some technical amendments to address those questions.  The League has been directly involved in the negotiations on these bills and has been supportive based upon the positive impacts anticipated from many of these changes.  A vote is expected next week, as Treasury aims for completion of legislative action on the bills before the summer recess.

Chris Hackbarth is the League’s director of state affairs. He can be reached at 517-908-0304and chackbarth@mml.org

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