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Personal Property Tax Credits

Personal Property Tax Credits

New and Revised Tax Credits 

  • A new credit for 0.37% of Michigan compensation.
  • A revised, 2.9% Michigan investment tax credit. (Compensation and Investment credits are limited to 65% of a taxpayer's tax liability, before credits.)
  • A new credit for 1.9% of Michigan research and development expenses.

Personal Property Tax Reductions 

  • Industrial personal property is exempt from the 6 mill state education tax and is also exempt from up to 18 mills levied for school operating purposes.
  • Commercial personal property is exempt from up to 12 of the mills levied for school operating purposes.

Additional MBT Credits Available Based on Eligible Personal Property Taxes Paid 

  • A taxpayer may claim a credit against the MBT equal to 35% of the eligible industrial personal property taxes paid.
  • For tax year 2008 only, a taxpayer may claim a credit against the MBT equal to 23% of the eligible state assessed telephone personal property taxes paid under Public Act 282 of 1905. For tax year 2009 and subsequent tax years, a taxpayer may claim a credit against the MBT equal to 13.5% of the eligible state assessed telephone personal property taxes paid under Public Act 282 of 1905.
  • A taxpayer may claim a credit against the MBT equal to 10% of the eligible utility personal property taxes paid.

The various personal property tax provisions replace the current 15% credit for taxes paid on industrial personal property.

State Tax Commission has Issued Bulletin 2007-07 on Michigan Business Tax (MBT)