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PPT Reimbursement Update

Posted on May 29, 2019 by Dene Westbrook

As Treasury continues to implement changes to the state’s Personal Property Tax reimbursement system that were enacted last year, many communities received the second portion of their 2018 reimbursement distributions from the Local Community Stabilization Authority (LCSA) in recent days.

One element of the changes enacted last summer resulted in PPT loss reimbursement payments being split into two components; the first distribution occurred last October and covered 100% of eligible losses.  Any funds remaining after that 100% distribution were then available to address error corrections/appeals to be distributed annually the following May.  Following the disbursement of those error corrections, any remaining funds are distributed on a pro-rata basis to communities based upon their proportion of eligible qualified loss.

The Personal Property Tax reimbursements that were issued on May 20, 2019 are a combination of the 2016, 2017, and 2018 PPT reimbursement corrections and the final distribution of the remaining balance of the local community stabilization share revenue.  This distribution of the year’s remaining balance provides counties, cities, villages, townships, and community colleges with a supplemental PPT reimbursement of 144.5263% of their 2018 qualified loss.  This number will change annually and any pro-rata payments will phase-out as the reimbursement process shifts from being based on 2012 loss to the forthcoming “dynamic” formula.

Additionally, Treasury provided the following information today regarding the millage rate data used to calculate each community’s reimbursement and the process and forms to be used should there be any error in the millage data that Treasury utilized in their calculations:

The Local Community Stabilization Authority Act (LCSA Act), 2014 Public Act 86, as amended, requires the Department of Treasury (Treasury) to calculate and make available each municipality’s calculated millage rate eligible for personal property tax (PPT) reimbursement (MCL 123.1345(x)(ii), MCL 123.1353(5)(b), MCL 123.1353(5)(c)).

The 2012-2018 Millage Rate Comparison reports are available on Treasury’s PPT reimbursement website. These reports are intended to be used by municipalities to verify the eligible millage rates to be used in the 2019 PPT reimbursement calculations.

Municipalities should review the 2012-2018 Millage Rate Comparison reports for accuracy. If the millage rate data is correct, there is no further action a municipality should take.

If there are any errors in the millage rate data, the municipality is required by the LCSA Act to notify Treasury of the error no later than August 1, 2019 (MCL 123.1358(4)). The millage rate correction should be reported to Treasury on the Millage Rate Correction for 2019 Personal Property Tax Reimbursement Calculations (Form 5613).

Below is a list of the reporting forms related to millages that are available on Treasury’s PPT Reimbursement website.

Form Number Form Title/Form Purpose Due Dates
5608 Portion of 2018 Essential Services Millage Rate Dedicated for the Cost of Essential Services

Optional form to be used by counties, cities, villages, townships, and authorities that levy an extra-voted millage rate that partially funds the cost of essential services (for example a fire/cemetery millage). For those millages that Treasury has identified that partially fund essential services, Treasury has identified the millage type as PART ES on the 2012-2018 Millage Rate Comparison reports.

August 1, 2019
5613 Millage Rate Correction for 2019 Personal Property Tax Reimbursement Calculations

Optional form to be used by municipalities that identify an error in the 2012-2018 Millage Rate Comparison reports.

August 1, 2019

Please direct any questions regarding the PPT reimbursement calculation or correction process to TreasORTAPPT@michigan.gov or 517-335-7484.

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

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