Qualified Heavy Equipment Rental Personal Property (QHERPP) Program

The QHERPP program was established under Public Act 35 of 2022 (Qualified Heavy Equipment Rental Personal Property Specific Tax Act) to address the taxation of certain heavy equipment rental personal property, beginning January 1, 2023.

Qualified renters of eligible personal property must apply for a QHERPP exemption from their local assessor each year. Qualified renters that receive a QHERPP exemption from their local assessor become Qualified Rental Business Locations (QRBLs) and are responsible for:

• Collecting the QHERPP tax on rental transactions of exempt personal property
• Remitting the collected tax to Treasury

Revenues generated from the QHERPP tax are distributed to local units. This distribution is designed to replace traditional personal property tax revenue that may be lost due to QHERPP exemptions.

QHERPP revenues include QHERPP tax collections and fund interest earnings, less administrative costs.

QHERPP Distributions

QHERPP revenue is distributed to local units under two methods, depending on whether a local unit has a QRBL within their boundaries:

• QHERPP 90% Distribution

• Recipients: Cities and townships with approved QHERPP exemptions where the related QRBLs remitted QHERPP specific taxes to Treasury during the distribution collection period.
• Distribution Schedule:
  • September Distribution: 90% of fund revenues collected January – June
  • March Distribution: 90% of fund revenues collected July – December
• Calculation: The distribution is based on the revenue remitted during the distribution collection period. The local unit’s distribution is the sum of the following calculation for each QRBL located within the local unit:
  • Available 90% QHERPP Revenues * (Individual QRBL Tax Remittances / Total of All QRBL Tax Remittances)
• Allocations to Taxing Units:
  • Cities and townships must allocate QHERPP 90% distributions, within 35 days of receipt, to other taxing units that levied a millage on the QRBL. Other taxing units include, but is not limited to, school districts, intermediate school districts, authorities, villages, and counties.
  • Cities and townships must remit to Treasury the amount that would otherwise be disbursed to a local school district for school operating purposes or to an intermediate school district receiving state aid under Section 56 or 62 of the State School Aid Act (1979 PA 94, MCL 388.1656 and 388.1662).
  • Coming Soon - Treasury guidance regarding the allocation of QHERPP 90% distributions to other taxing units and the School Aid Fund.

• QHERPP 10% Distribution

• Recipients: Cities, villages, townships, and counties that did not receive a QHERPP 90% distribution, directly or indirectly.
• Distribution Schedule:
  • July Distribution: 10% of the fund revenues collected January – December
• Calculation: Distributions are calculated using a local unit’s proportional share of the total personal property tax reimbursements for the calendar year.
  • Local units will not receive a payment if the distribution calculation is less than $0.01.

Use of Funds and Chart of Account

Distributions not allocated to other taxing units can be spent as General Fund. These funds should be accounted for using chart of account 101-000-569, Other State Grants. If the local unit believes this should be recorded separately, an open account under state grants may be used.

Distribution Reports

FY 2023 Qualified Heavy Equipment Rental Personal Property Distributions (Issued 7/31/2025) (PDF)
FY 2023 Qualified Heavy Equipment Rental Personal Property Distributions (Issued 7/31/2025) (Excel)

Public Acts

2022 PA 35 Entire Act (Qualified Heavy Equipment Rental Personal Property Specific Tax Act)
2022 PA 46 Entire Act (Amended - The General Property Tax Act)

Contact Information:

Revenue Sharing and Grants Division
Phone: 517-335-7484 
Fax: 517-335-3298 
Email: TreasRevenueSharing@michigan.gov