Introduction
The small business tax exemption under MCL 211.9o is a Michigan-specific benefit that allows qualifying small businesses to exempt eligible personal property from property taxes. To claim this exemption, businesses must file an affidavit annually with the local assessor.
This guide provides step-by-step instructions for preparing and submitting the affidavit to claim the small business tax exemption, along with eligibility requirements and key deadlines.
1. What Is the Small Business Tax Exemption Under MCL 211.9o?
The exemption under MCL 211.9o applies to small businesses in Michigan and allows them to exclude eligible personal property from property taxes.
- Eligible Property: Tangible personal property owned by the business.
- Purpose: Reduce the tax burden on small businesses by eliminating property tax obligations for qualifying assets.
2. Eligibility Requirements
To qualify for the exemption, the business must meet the following criteria:
Business Type
- The property must be owned by a business entity (sole proprietorship, partnership, corporation, etc.).
Total Value of Personal Property
- The total true cash value of the business’s personal property in the jurisdiction must be less than $80,000.
Property Use
- The personal property must be used for business purposes.
3. Filing the Affidavit
The affidavit to claim the exemption is filed using Form 5076 – Small Business Property Tax Exemption Claim Affidavit.
Step 1: Obtain the Form
- Download Form 5076 from the Michigan Department of Treasury website or obtain it from your local assessor’s office.
Step 2: Complete the Form
Include the following details:
- Business name and address.
- Parcel or property identification number(s).
- Confirmation that the total value of personal property is less than $80,000.
- Declaration that the information provided is accurate and truthful.
Step 3: Submit the Form
- File the affidavit with the local assessor in the city or township where the property is located.
- The affidavit must be submitted by February 20 of each tax year to qualify for the exemption.
Step 4: Retain a Copy
- Keep a copy of the affidavit for your records, along with any supporting documentation.
4. Deadlines and Key Dates
- Filing Deadline: February 20 of each tax year.
- Late Filing: Affidavits submitted after the deadline are not eligible for the exemption for that tax year.
5. Tips for Compliance
- Verify Property Value: Ensure the total cash value of all personal property does not exceed $80,000.
- File Annually: The exemption is not automatic; you must file the affidavit every year.
- Check with Local Assessor: Confirm local requirements and deadlines, as procedures may vary slightly.
- Maintain Records: Keep detailed records of property valuation and filed affidavits for audits.
6. Frequently Asked Questions
1. What happens if my property value exceeds $80,000?
If the true cash value of your property exceeds $80,000, you are not eligible for the exemption and must pay property taxes.
2. Can I file the affidavit online?
Some local jurisdictions may offer online filing options. Contact your local assessor to verify.
3. Do I need to file a new affidavit every year?
Yes, the exemption must be claimed annually by filing a new affidavit.
4. What happens if I miss the filing deadline?
Late affidavits are not accepted, and you will be required to pay property taxes for the year.
5. Can I amend my affidavit after submission?
Amendments may be allowed before the deadline. Contact your local assessor for guidance.
7. Conclusion
Filing the affidavit to claim the small business tax exemption under MCL 211.9o is a simple yet essential process for reducing property tax obligations in Michigan. By meeting the eligibility criteria, completing Form 5076 accurately, and submitting it on time, small businesses can take advantage of this valuable tax benefit.