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Frequently Asked Questions

Frequently Asked Questions

  • The SBTE Reimbursements are disbursed from the Local Government Reimbursement Fund.  The Local Government Reimbursement Fund is funded with revenues from the state share of Use Tax.

  • Annually, local assessors provide Small Business Taxpayer Exemption (SBTE) claim information to the Michigan Department of Treasury (Treasury).  SBTE claims filed by taxpayers that own, lease, or possess eligible personal property having a combined true cash value equal to or greater than $80,000 but less than $180,000 are eligible for reimbursement.

    Treasury calculates the personal property tax revenue lost based on 50% of the true cash value, the millage rate levied by the municipality, and adjusting for other exemptions or tax increment finance authority capture.

    Example: For Tax Year 2023, a taxpayer files an SBTE claim for eligible personal property having a combined true cash value of $125,000.  The property is in a Renaissance Zone that will expire at the end of 2023 and therefore is 25% exempt from property taxes on operating millage. The City levies a general operating millage of 10.0000 mills.

    The following shows how to calculate an SBTE Reimbursement for the City:

     

    True Cash Value

    $125,000

    x 50%

    X 50%

    Assumed Taxable Value

    $62,500

    x Millage Rate Levied

    X 10.0000

    ÷ 1,000

    ÷ 1,000

    Property Tax Revenue Lost before Adjustments

    $625

    - Renaissance Zone Exemption ($625 x 25%)

    - $156.25

    Small Business Taxpayer Exemption (SBTE) Reimbursement

    $468.75

  • The Small Business Taxpayer Exemption (SBTE) Reimbursements will be issued by the State of Michigan in the year immediately following the tax year of the exemption. For example, the municipality will be reimbursed for a 2023 SBTE in 2024.

  • For counties, cities, villages, townships, libraries, authorities, and tax increment finance authorities, record SBTE reimbursement revenue to revenue account 569, State Grants - Other.

    For local school districts and intermediate school districts, record SBTE reimbursement revenue to revenue major class code 321, suffix 0000.

    It is recommended that the SBTE reimbursement be allocated proportionally based on the same distribution used for the original millage levied. To assist with allocating the SBTE reimbursement revenue, the Distribution by Millage report is available on the webpage for each specific tax year’s SBTE distribution.

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