Commercial Equipment PPT Tax Cut Moves Despite Opposition

Posted on December 2, 2020 by Dene Westbrook

The Senate Economic & Small Business Development committee reported a series of bills along a party line vote this afternoon to exempt consumer goods handling equipment and so-called “micro-fulfillment” systems from personal property tax assessment.  Senate Bills 1149, 1150, & 1153  would offer sales, use, and personal property tax exemptions to large retailers for their new warehouse distribution equipment like what Meijer uses at their Delta Township distribution facility in Eaton County.

Separately, Senate Bills 1178, 1179, & 1180 would offer similar sales, use, and personal property tax exemptions for consumer goods “micro-fulfillment” systems that many retailers are moving to as they work to handle the increased demand from online orders.

The Municipal League, along with all other local government and school organizations and the Michigan Department of Treasury have actively opposed this legislation, along with a duplicate package that was heard by the House Tax Policy committee yesterday but was not voted on (HBs 6196-6198 and 6284-6286).

Testimony from Meijer indicated that the company views this warehouse/distribution equipment as no different than other industrial equipment that was exempted under the Eligible Manufacturing Personal Property reform package in 2014, yet the proposal moved out of Senate committee today makes no effort to provide for a similar local reimbursement mechanism, as is the case with EMPP.

With the extremely limited number of session days remaining this year, these six bills are expected to be brought up quickly in the Senate tomorrow for a full vote.  League members are urged to contact their State Senator this evening and tomorrow morning to express opposition to these bills.  Please let your legislators know that these tax cuts are causing irreparable harm to local budgets, services, and residents.

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and [email protected].

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