ESA Topic: EMPP Rescissions and Appeals

The Michigan Department of Treasury is required to order the rescission of Eligible Manufacturing Personal Property (EMPP) exemptions if the claimant does not pay the annual Essential Services Assessment (ESA) and any applicable late payment penalty in full by April 15^th of the year immediately following the assessment year or if Treasury determines that the personal property is not eligible for an EMPP exemption. This ESA Topic covers rescissions of current year exemptions.

Treasury may also rescind an EMPP exemption as a result of an audit. Information on appealing the findings – including rescission – based on an audit can be found in the ESA Topic covering audits.

Orders of Rescission

MCL 211.1057(5) requires that the EMPP exemption shall be rescinded on any parcel in which a claimant does not submit payment in full of the ESA and applicable late payment penalty by April 15^th of the year immediately following the year in which the exemption is claimed. Treasury may also issue an Order of Rescission if it is determined that the property is not eligible for the EMPP exemption. The Order of Rescission shall be issued by Treasury not later than the first Monday in June of the year immediately following the assessment year.

Once the Order of Rescission is issued, affected parcels will be removed from the ESA statement by Treasury and the assessor ordered to return the parcel on the local assessment roll. The claimant will then be responsible for any personal property taxes levied on that parcel by the city or township for the tax year claimed. The rescission is for the assessment year noted on the Order of Rescission only and a rescission in one year does not prohibit the taxpayer from claiming the EMPP exception in subsequent years. Parcels that received the EMPP exemption in the immediately preceding year carry forward the exemption in each subsequent year until the property becomes ineligible for the exemption and Form 5277 is filed. If the EMPP was exempt in the previous assessment year, a Combined Document (Form 5278) does not need to be filed for the EMPP to be exempt for the current assessment year.

Within 30 days of the date of the Order of Rescission, the claimant of a rescinded EMPP exemption is required by statute to file a Personal Property Statement (Form 632) with the assessor of the local tax collecting unit in which the property was located on Tax Day.

Although statute does not require the assessor to provide a copy of the Personal Property Statement. Treasury advises that assessors do so. Doing so serves as a reminder to taxpayers of their obligation as well as ensures that the correct annual version of the Personal Property Statement is submitted.

The Order of Rescission issued by Treasury is the necessary authority for the assessor of the local unit to correct the current year assessment roll. It is not necessary for an assessor to take this matter to any Board of Review, as the July and December Boards of Review have no authority over EMPP or ESA.

Within 60 days of the date of the Order of Rescission, the treasurer of the local unit is required to issue amended tax bills to the taxpayer based upon the assessment entered on the assessment roll by the assessor. These tax bills are required to include all delinquent local property taxes, penalty, and interest.

Treasury will hold any refunds on any partially paid rescissions until January of the subsequent year.

Taxpayers are required to report any parcel that no longer qualifies for the EMPP exemption. A parcel may cease to qualify because the property no longer meets the definition of “eligible manufacturing personal property” or because the parcel has no value (e.g. all equipment has been removed, the parcel is subject to an expired IFT certificate, etc.). To report a parcel that no longer qualifies for the exemption, Form 5277 must be filed with the assessor in which the parcel is reported.

Appealing an Order of Rescission

A taxpayer who disagrees with an Order of Rescission of an EMPP exemption issued by Treasury or the rescission of an extended IFT or extended PA 328 certificate issued by the State Tax Commission may appeal that rescission to the Michigan Tax Tribunal (MTT) by December 31st of the year in which the rescission is ordered. Appeals may be filed with the Michigan Tax Tribunal to dispute a rescission of an assessment on, or late payment penalty calculated for an EMPP exemption under MCL 211.1057(7).

A taxpayer who wishes to appeal must submit a petition, along with proof of service and a filing fee, to the MTT following the instructions available on the Tribunal’s website. Taxpayers do not need to contact Treasury to communicate an intent to appeal. The proof of service required by MTT is notification to Treasury that an appeal has been filed. Claims may be eligible to be heard in either the MTT’s Entire Tribunal or Small Claims divisions, depending on the amount in contention.

More information about MTT practice and procedures is available from MTT at their website, by email at taxtrib@michigan.gov, or by calling 517-335-9760.

This information constitutes an interpretation of one or more statutes administered by the Bureau of Local Government and School Services and not legal advice. As the interpretation reached in these examples are limited to the facts provided, any variation in those facts might result in a different interpretation being reached. Therefore, a taxpayer may wish to consult counsel before proceeding in this matter.