SB-0490, As Passed House, October 17, 2013
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 490
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending sections 9m and 9n (MCL 211.9m and 211.9n), section 9m
as added by 2012 PA 401 and section 9n as added by 2012 PA 403.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 9m. (1) Beginning December 31, 2015 and each year
thereafter, qualified new personal property for which an exemption
has been properly claimed under subsection (2) is exempt from the
collection of taxes under this act.
(2)
An owner of qualified new personal property A person shall
claim the exemption under this section by filing an affidavit with
the local tax collecting unit in which the qualified new personal
property
is located and with the department of treasury not later
than
February 20, 2016. as
provided in subsection (3). The
affidavit
shall be in a form prescribed by the department of
treasury.
An owner of qualified new personal property is only
required
to file the affidavit claiming the exemption under this
section
in 2016.state tax commission.
An affidavit claiming an
exemption under this section applies to all existing and
subsequently acquired qualified new personal property.
(3)
If an affidavit claiming the exemption under this section
is
filed in 2016 as provided in subsection (2), the owner of that
qualified
new personal property is not required to also file a
statement
under section 19 for that qualified new personal property
in
2016.
(4)
Beginning in 2017 and each year after 2017, an owner of
qualified
new personal property is not required to file an
affidavit
claiming the exemption under this section for qualified
new
personal property and is not required to file a statement under
section
19 for that qualified new personal property. An owner of
qualified
new personal property exempt under this section shall
provide
documentation evidencing the date of purchase of that
qualified
new personal property to the assessor of the local tax
collecting
unit upon request.
(3) If a person claiming an exemption under this section has
not filed an affidavit under this section in any prior year with
the local tax collecting unit in which the qualified new personal
property is located, that person shall file the affidavit described
under subsection (2) with that local tax collecting unit not later
than February 10 of the first year for which the person is claiming
the exemption for qualified new personal property in the local tax
collecting unit.
(4) Except for a person claiming an exemption under this
section for personal property that was subject to section 9f or
1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit
claiming the exemption under this section is filed as provided in
subsection (3) by February 10, 2016, and the person claiming the
exemption under this section complied with section 19(9) in 2015,
or if the filing requirement under section 19(9) was not applicable
because the qualified new personal property was acquired in 2015,
the person claiming the exemption under this section is not
required to file a statement under section 19 for that qualified
new personal property in 2016. Except for a person claiming an
exemption under this section for personal property that was subject
to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if
an affidavit claiming the exemption under this section is filed as
provided in subsection (3), beginning in 2017, the person claiming
the exemption under this section is not required to file a
statement under section 19 for qualified new personal property
exempt under this section. For a person claiming an exemption under
this section for personal property that was subject to section 9f
or 1974 PA 198, MCL 207.551 to 207.572, in 2015, if an affidavit
claiming the exemption under this section is filed as provided in
subsection (3) and the person claiming the exemption under this
section complied with section 19(9) in 2015, the person claiming
the exemption under this section is not required to file a
statement under section 19 for that qualified new personal property
in the first year for which that person is claiming an exemption
under this section or in any subsequent year. For a person claiming
an exemption under this section for personal property that was
subject to section 9f or 1974 PA 198, MCL 207.551 to 207.572, in
2015, if an affidavit claiming the exemption under this section is
filed as provided in subsection (3), but the person claiming the
exemption under this section did not comply with section 19(9) in
2015, the person claiming the exemption under this section shall
file a statement under section 19 for that person's qualified new
personal property in the first year for which that person is
claiming an exemption under this section for qualified new personal
property, but that person is not required to file a statement under
section 19 for that qualified new personal property in any
subsequent year. If the person claiming the exemption under this
section has not filed an affidavit as required under subsection
(2), the personal property for which the person is claiming an
exemption is subject to the collection of taxes under this act and
that person shall file a statement under section 19.
(5) If the assessor of the local tax collecting unit believes
that personal property for which an affidavit claiming an exemption
is filed under subsection (2) is not qualified new personal
property, the assessor may deny that claim for exemption by
notifying the person that filed the affidavit in writing of the
reason for the denial and advising the person that the denial may
be appealed to the board of review under section 30 or 53b. The
assessor may deny a claim for exemption under this subsection for
the current year only. If the assessor denies a claim for
exemption, the assessor shall remove the exemption of that personal
property and amend the tax roll to reflect the denial and the local
treasurer shall within 30 days of the date of the denial issue a
corrected tax bill for any additional taxes.
(6) A person claiming an exemption for qualified new personal
property exempt under this section shall maintain books and records
and shall provide access to those books and records as provided in
section 22.
(7) If a person fraudulently claims an exemption for personal
property under this section, that person is subject to the
penalties provided for in section 21(2).
(8) (5)
As used in this section:
(a) "Affiliated person" means a sole proprietorship,
partnership, limited liability company, corporation, association,
flow-through entity, member of a unitary business group, or other
entity related to a person claiming an exemption under this
section.
(b) (a)
"Direct integrated
support" means research any
of the
following:
(i) Research and development functions,
testing related to
goods produced in industrial processing and conducted in
furtherance of that industrial processing.
(ii) Testing and quality
control functions , engineering
related to goods produced in industrial processing and conducted in
furtherance of that industrial processing.
(iii) Engineering functions ,
warehousing facilities that
directly
support the owner or lessee engaging in industrial
processing
and that store tangible personal property owned by that
owner
or lessee, and sorting and distribution centers related to
goods produced in industrial processing and conducted in
furtherance of that industrial processing.
(iv) Receiving or storing equipment, materials, supplies,
parts, or components for industrial processing, or scrap materials
or waste resulting from industrial processing, at the industrial
processing site or at another site owned or leased by the owner or
lessee of the industrial processing site.
(v) Storing of finished goods inventory if the inventory was
produced by a business engaged primarily in industrial processing
and if the inventory is stored either at the site where it was
produced or at another site owned or leased by the business that
produced the inventory.
(vi) Sorting, distributing, or sequencing functions that
optimize
transportation and use just-in-time inventory management
and material handling for inputs to industrial processing.
(c) (b)
"Eligible manufacturing
personal property" means all
personal
property that is located on a parcel of real property if
that
personal property is used more than 50% of the time in
industrial
processing or in direct integrated support. The
percentage
of use of personal property in industrial processing or
in
direct integrated support shall be determined in the following
manner:
(i) Multiply the true cash value of each individual
item of
personal
property located on that parcel of real property by its
percentage
of use in industrial processing or in direct integrated
support.
(ii) Add the result of the calculation under
subparagraph (i)
for
all personal property located on that parcel of real property.
(iii) Divide the result of the calculation under
subparagraph
(ii) by the total true cash value of all personal
property located
on
that parcel of real property.located
on occupied real property
if that personal property is predominantly used in industrial
processing or direct integrated support. Personal property located
on occupied real property is predominantly used in industrial
processing or direct integrated support if the result of the
following calculation is more than 50%:
(i) Multiply the original cost of all personal property located
on that occupied real property by its percentage of use in
industrial processing or in direct integrated support. Personal
property is used in industrial processing if it is not used to
generate electricity for sale and if its purchase or use by the
person claiming the exemption would be eligible for exemption under
section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t,
or section 4o of the use tax act, 1937 PA 94, MCL 205.94o. For an
item of personal property that is used in industrial processing,
its percentage of use in industrial processing shall equal the
percentage of the exemption the property would be eligible for
under section 4t of the general sales tax act, 1933 PA 167, MCL
205.54t, or section 4o of the use tax act, 1937 PA 94, MCL 205.94o.
(ii) Divide the result of the calculation under subparagraph (i)
by the total original cost of all personal property located on that
occupied real property.
(d) (c)
"Industrial processing"
means the conversion or
conditioning
of tangible personal property by changing the form,
composition,
quality, combination, or character of the property for
ultimate
sale at retail or for use in the manufacturing of a
product
to ultimately be sold at retail. that
term as defined in
section 4t of the general sales tax act, 1933 PA 167, MCL 205.54t,
or section 4o of the use tax act, 1937 PA 94, MCL 205.94o.
Industrial processing does not include the generation of
electricity for sale.
(e) (d)
"New personal property"
means property that meets all
of
the following conditions:
(i) Before January 1, 2013, was not subject to or
exempt from
the
collection of taxes under this act, except inventory exempt
under
section 9c, and was not in use or placed in service in this
state.
(ii) Before January 1, 2013, was not in use or placed
in
service
outside of this state.
(iii) Was initially purchased from the manufacturer,
dealer,
distributor,
or other vendor of new property after December 31,
2012.was initially placed in service in this state or
outside of
this state after December 31, 2012.
(f) "Occupied real property" means all of the following:
(i) A parcel of real property that is entirely owned, leased,
or otherwise occupied by a person claiming an exemption under this
section.
(ii) Contiguous parcels of real property that are entirely
owned, leased, or otherwise occupied by a person claiming an
exemption under this section and that host a single, integrated
business operation engaged primarily in industrial processing,
direct integrated support, or both. A business operation is not
engaged primarily in industrial processing, direct integrated
support, or both if it engages in significant business activities
that are not directly related to industrial processing or direct
integrated support.
(iii) The portion of a parcel of real property that is owned,
leased, or otherwise occupied by a person claiming the exemption or
by an affiliated person.
(g) (e)
"Qualified new personal
property" means property that
meets all of the following conditions:
(i) Is eligible manufacturing personal property.
(ii) Was Is new personal property. after
December 31, 2012.
Sec. 9n. (1) Beginning December 31, 2015 and each year
thereafter, qualified previously existing personal property for
which an exemption has been properly claimed under subsection (2)
is exempt from the collection of taxes under this act.
(2)
An owner of qualified previously existing personal
property
A person shall claim the exemption under this section by
filing an affidavit with the local tax collecting unit in which the
qualified
previously existing personal property is located and the
department
of treasury not later than February 20. as provided in
subsection (3). The affidavit shall be in a form prescribed by the
department
of treasury. An owner of qualified state
tax commission.
A person claiming an exemption for previously existing personal
property is only required to file the affidavit claiming the
exemption
under this section in for the first year in for which
the
exemption for that qualified previously existing personal property
is claimed in the local tax collecting unit.
(3)
If an affidavit claiming the exemption under this section
is
filed as provided in subsection (2), the owner of that qualified
previously
existing personal property is not required to also file
a
statement under section 19 for that qualified previously existing
personal
property in that tax year or any succeeding tax year.
(3) If a person claiming an exemption under this section has
not filed an affidavit under this section in any prior year with
the local tax collecting unit in which the qualified previously
existing personal property is located claiming an exemption for
that qualified previously existing personal property, that person
shall file the affidavit described under subsection (2) with that
local tax collecting unit not later than February 10 of the first
year for which the person is claiming the exemption for that
qualified previously existing personal property in the local tax
collecting unit. If an affidavit claiming the exemption for
qualified previously existing personal property under this section
is filed as provided in this subsection and the person claiming an
exemption for that qualified previously existing personal property
complied with section 19(9) with respect to that qualified
previously existing personal property in 2015, or if the filing
requirement under section 19(9) was not applicable because the
qualified previously existing personal property was acquired in
2015 or later, the person claiming the exemption under this section
is not required to also file a statement under section 19 for that
qualified previously existing personal property in the first year
for which the exemption is claimed or in any subsequent year. If an
affidavit claiming the exemption for qualified previously existing
personal property under this section is filed as provided in this
subsection but the person claiming the exemption under this section
did not comply with section 19(9) with respect to that qualified
previously existing personal property in 2015, the person claiming
the exemption under this section shall file a statement under
section 19 for that qualified previously existing personal property
in the first year for which the person is claiming an exemption for
that qualified previously existing personal property, but the
person is not required to file a statement under section 19 for
that qualified previously existing personal property in any
subsequent year. If a person claiming an exemption for qualified
previously existing personal property has not filed an affidavit as
required under this section, that person's qualified previously
existing personal property is subject to the collection of taxes
under this act and that person shall file a statement under section
19.
(4) If the assessor of the local tax collecting unit believes
that personal property for which an affidavit claiming an exemption
is filed under subsection (2) is not qualified previously existing
personal property, the assessor may deny that claim for exemption
by notifying the person that filed the affidavit in writing of the
reason for the denial and advising the person that the denial may
be appealed to the board of review under section 30 or 53b. The
assessor may deny a claim for exemption under this subsection for
the current year only. If the assessor denies a claim for
exemption, the assessor shall remove the exemption of that personal
property and amend the tax roll to reflect the denial and the local
treasurer shall within 30 days of the date of the denial issue a
corrected tax bill for any additional taxes.
(5) A person claiming an exemption for qualified previously
existing personal property exempt under this section shall maintain
books and records and shall provide access to those books and
records as provided in section 22.
(6) If a person fraudulently claims an exemption for personal
property under this section, that person is subject to the
penalties provided for in section 21(2).
(7) (4)
As used in this section:
(a)
"Direct integrated support" means research and development
functions,
testing and quality control functions, engineering
functions,
warehousing facilities that directly support the owner
or
lessee engaging in industrial processing and that store tangible
personal
property owned by that owner or lessee, and sorting and
distribution
centers that optimize transportation and use just-in-
time
inventory management and material handling for inputs to
industrial
processing.
(b)
"Eligible manufacturing personal property" means all
personal
property that is located on a parcel of real property if
that
personal property is used more than 50% of the time in
industrial
processing or in direct integrated support. The
percentage
of use of personal property in industrial processing or
in
direct integrated support shall be determined in the following
manner:
(i) Multiply the true cash value of each individual
item of
personal
property located on that parcel of real property by its
percentage
of use in industrial processing or in direct integrated
support.
(ii) Add the result of the calculation under
subparagraph (i)
for
all personal property located on that parcel of real property.
(iii) Divide the result of the calculation under
subparagraph
(ii) by the total true cash value of all personal
property located
on
that parcel of real property.
(c)
"Industrial processing" means the conversion or
conditioning
of tangible personal property by changing the form,
composition,
quality, combination, or character of the property for
ultimate
sale at retail or for use in the manufacturing of a
product
to ultimately be sold at retail. Industrial processing does
not
include the generation of electricity for sale.
(a) "Direct integrated support", "eligible manufacturing
personal property", and "industrial processing" mean those terms as
defined in section 9m.
(b) (d)
"Qualified previously existing
personal property"
means personal property that meets all of the following conditions:
(i) Is eligible manufacturing personal property.
(ii) Meets any of the following conditions:
(A) Has been subject to or exempt from the collection of taxes
under this act for the immediately preceding 10 years.
(B) If that personal property was located both outside of and
within this state in the immediately preceding 10 years, that
personal property was subject to or exempt from the collection of
taxes under this act, or would have been subject to or exempt from
the collection of taxes under this act if located in this state,
for the immediately preceding 10 years.
(C) If that personal property was located outside of this
state in the immediately preceding 10 years, that personal property
would have been subject to or exempt from the collection of taxes
under this act for the immediately preceding 10 years if that
personal property had been located in this state.