mICHIGAN | Out of Step With Other States In the Region

 
 

Michigan only provides minimal relief from the state’s onerous business personal property tax on heavy equipment rentals. The state’s de minimis exemption is low and fails to adequately relieve the complex administrative burden the tax creates.

Many other states in the region provide relief, adopted reforms, or don’t levy the tax at all. Minnesota, Illinois, and Ohio all do without the tax on heavy equipment rentals entirely, while Wisconsin treats the rental fleet as inventory and exempts it from the tax. Indiana just passed a new law that exempts the rental fleet from personal property tax and replaces it with an excise tax.

As other states move towards reform, Michigan is falling behind. To make the state more competitive with its neighbors, it should replace the existing tax with an alternative replacement tax that would ease compliance and would maintain local tax revenue.

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