LANSING—Legislation to eliminate the personal property tax (PPT) while providing a stable and improved revenue source to communities was approved by the Michigan Senate on Tuesday, said Sen. Darwin Booher.
“This reform is about standing up for our small businesses and our local communities,” said Booher, R-Evart. “Phasing out the personal property tax will help create jobs by making Michigan competitive and attractive to entrepreneurs. This plan will help us achieve this goal while reimbursing local governments and schools for lost tax revenue – ensuing they have the resources necessary to maintain public safety and educate our children.”
Senate Bills 821-830 would update the personal property tax phase-out and reform approved in 2012 by increasing replacement revenue for local governments through a greater portion of the state’s 6 percent Use Tax on out-of-state purchases and imposing a statewide assessment on newly exempt businesses.
“I was proud to support a comprehensive plan to end the PPT, a punitive tax that has been costing Michigan jobs and investment for decades,” Booher said. “This reform is about rejecting the status quo that failed the state and adopting a new strategy to help energize our economy, spur job creation and protect our local communities.”
Under the 2012 legislation, only essential local public services like police and fire would have 100 percent of their revenues from the PPT replaced by the state. The new reform would reimburse all local governments 100 percent of their lost revenues beginning in 2016.
This reimbursement to local governments will be constitutionally guaranteed and not subject to an annual appropriation by the state Legislature.
SBs 821-830 now head to the House of Representatives for consideration. If the plan is approved by the House and the governor, it will go to the Michigan voters for final approval on the August ballot.
“We are taking action to help create well-paying jobs in Michigan and support our communities, but it will all be contingent on an important vote by the people this August,” Booher said.