Payments

I filed the Combined Document (Form 5278) with the assessor or March Board of Review, and was told the EMPP exemption was granted, but my parcel isn’t on my ESA statement. What do I do?

Please contact the ESA unit as soon as possible at 517-241-0310 or ESAQuestions@michigan.gov. In some cases, it may be a simple matter of information not being submitted timely to the Department of Treasury and we can request this information and an explanation from the assessor. In other cases, the issue may be more complicated but ESA staff will be able to advise on possible resolutions.

The assessor did not properly process the exemption. What do I do?

If, for any reason, the assessor neither exempted the parcel from the local roll prior to certifying it nor forwarded the information reported on Form 5278 to the Department, the assessor effectively denied the exemption. Neither the assessor nor the Department has any authority to grant the exemption after the close of the March Board of Review. 

If this denial of the EMPP exemption was unintentional – due to an error made by the assessor – the only remedy is an appeal to the Michigan Tax Tribunal (MTT). Per statute, appeals to the MTT must be filed within 35 days of the denial notice.  If you did not receive a denial notice, you may wish to contact the Tribunal or local legal counsel to determine what, if any, appeal rights you may have.  Their contact information is available at www.michigan.gov/taxtrib.

The Assessor and Taxpayer wish to file a stipulated agreement with the Michigan Tax Tribunal, is there any information that must be included?

In order for the Department of Treasury to update or generate an ESA statement based upon a Michigan Tax Tribunal order, a stipulated agreement must include language that clearly indicates the following:

1. The property on the parcel is eligible manufacturing personal property as defined by MCL 211.9m(8) and that some or all of the eligible manufacturing personal property is “qualified new personal property” as defined under MCL 211.9m or “qualified previously existing personal property” as defined under MCL 211.9n and therefore exempt from local property taxes.

    

2. The acquisition costs of the eligible manufacturing personal property that is exempt under MCL 211.9m or MCL 211.9n listed in the years in which the property was acquired by the original owner.

    

3. A statement that the assessor must forward a copy of the consent judgment and Form 5278 to the Department of Treasury within 15 days of the date of the consent judgment, that the Department of Treasury must generate or amend the taxpayer’s ESA statement within 15 days of receipt of Form 5278, and that the taxpayer must pay full liability with any interest or penalty assigned by the Tribunal, within 30 days of posting the ESA statement. The taxpayer should also be advised that failing to pay ESA liability and any interest or penalty will result in rescission of the EMPP exemption.

When filling out the Combined Document (Form 5278), I entered the incorrect FEIN. How can I change it on my ESA Statement?

Pursuant to MCL 211.1057(2), the Department of Treasury is required to annually generate, for each eligible claimant, an Essential Services Assessment (ESA) statement utilizing the information provided on the Combined Document (Form 5278) when claiming the Eligible Manufacturing Personal Property (EMPP) exemption with the local assessment unit.  Statute does not give authority to the Department of Treasury to amend the information that was certified true and accurate by the claimant at the time that the Combined Document (Form 5278) was filed.  This includes amending the FEIN/identity of the claimant and recipient of the EMPP exemption and therefore the party responsible for certifying the ESA statement and making payment of ESA liability.

If a Combined Document (Form 5278) was filed in 2023 with the wrong FEIN and the FEIN was not corrected on the 2023 return, in 2024 the taxpayer should file a Form 5277 (Affidavit to Rescind Eligible Manufacturing Personal Property Exemption) for the wrong FEIN so a Statement does not generate in 2024 for the wrong FEIN and they should file a Form 5278 with the correct FEIN by February 20 or directly with the March Board of Review prior to its adjournment.

We received the EMPP exemption in 2023 under our old FEIN, but in 2024 we want to use a new FEIN, what do we do?

File a Form 5277 (Affidavit to Rescind Eligible Manufacturing Personal Property Exemption) to rescind the exemption on the old FEIN and file a new Form 5278 (Combined Document) to claim the exemption under the new FEIN.  These forms are available on the ESA website, and both are due to the assessor by February 20.

I did not include Form 5467 when filing the Combined Document (Form 5278), may I still add leased equipment to my ESA statement?

Statute requires that for the lessee to report EMPP and pay ESA, Form 5467 – the Election of Lessee Report of Eligible Manufacturing Personal Property – must be completed and filed with Form 5278.  If that Form was not filed, then the property cannot be added the Lessee’s ESA statement for this year.

I have a Form 5467 on file exempt EMPP parcel but what do I do if we have a new or amended lease?

If a new or amended lease pertaining to an exempt EMPP parcel goes into effect, a new or amended Form 5467 should be filed with the assessor (no Form 5278 is necessary) so it can be kept on file in case of future audit, appeal, etc.

A Form 5467 should be filed along with the Form 5278 for any new claims of the EMPP exemption.

Is my IFT certificate eligible to be extended?

Because all acquisition years are exempt under MCL 211.9m or 9n, no IFT certificate that expired in any previous year will qualify to be extended.  From 2023 onward, all IFT certificates will expire on the date provided on the original or amended certificate.

I have an IFT certificate, why did I not receive a reduction to my ESA liability?

The State Essential Services Act (Act 92 of 2014) defines “acquisition cost” as “the fair market value of personal property at the time of acquisition by the first owner, including the cost of freight, sales tax, and installation, and other capitalized costs, except capitalized interest.” It further defines “acquisition cost” as one half this amount if the personal property is subject to an IFT certificate that was in effect before January 1, 2013.  Conversely, if the IFT certificate went into effect after 2012, personal property subject to it does not receive the benefit of being taxed ESA at one-half fair market value and is instead calculated on the full fair market value.

I have an unexpired IFT certificate that was in effect prior to January 1, 2013

EMPP that is subject to an unexpired IFT certificate that was in effect prior to January 1, 2013 will continue to benefit from the 50% reduction of true market value in calculating ESA liability until that certificate expires.

In 2023, we filed a Form 5278 for both the Ad Valorem and the IFT parcel (IFT expired and was previously extended).  Since all EMPP is exempt starting in 2023 and the IFT certificate is now expired, what do I do?

You should first contact the assessor to determine if the IFT parcel number is to be retired or if personal property will continue to be reported on that parcel. If it is to be retired, you can file a Form 5277 to end the EMPP exemption for the IFT parcel and report all property on the exempt ad valorem parcel.

I do not see my ESA statement/liability amount in MTO.  In MTO it says “not yet certified” in the current year ESA filing screen.

“Not yet certified” indicates that the business has not yet certified their return.  In order to access the statement and view the liability for the return, you must first certify the return by selecting “FILE” or “File and Pay ESA Statement” under ESA Actions and submitting a return.