A groundbreaking initiative in Michigan is seeking to become the first state in the U.S. to abolish property taxes. AxMITax, a group advocating for this change, is currently in the process of gathering signatures with the goal of placing the tax initiative on the November ballot.
Highlighting Michigan’s status with some of the highest property taxes in the nation, AxMITax spokesperson Karla Wagner underscores the severity of consequences, such as home, farm, or business loss, for those unable to pay these taxes. The proposed state constitutional amendment not only aims to eliminate tax foreclosure, but also to curb government overspending. Wagner believes that doing away with property taxes would enhance the state’s appeal to new businesses and encourage residents to stay.
Proposal to Eliminate Property Taxes
The proposed amendment suggests a shift towards ending tax foreclosure and discouraging government overspending. Wagner argues that the elimination of property taxes would not only retain residents but also attract new businesses. She emphasizes the detrimental impact of property taxes, driving people out of Michigan.
While the state’s most recent property tax report indicates around $18 billion derived from property taxes, the proposed amendment would alter the funding landscape. Instead of funding public services through property taxes, taxpayers would pay only for the services they utilize.
To address the lost funding for local government services like police, fire services, and road repairs, the proposed amendment suggests increasing state revenue sharing. However, Judy Allen, the Director of Government Relations at the Michigan Township Association, expresses concern about the potential devastating impact on public services due to a significant funding gap.
While AxMITax believes the elimination of property taxes will lead to economic growth, Allen remains skeptical, emphasizing the need for a comprehensive plan before creating a void. AxMITax aims to let voters decide the issue on the November ballot and must collect over 446,000 signatures by July 8 to move forward with their initiative.
The Property Taxes in Michigan: How Do They Work?
In the realm of personal property taxation, the General Property Tax Act outlines specific exemptions for various categories of personal property, including the Small Business Taxpayer Exemption, Eligible Manufacturing Personal Property, and Act 328 – New Personal Property. Comprehensive information on each exemption, including eligibility criteria and the process for claiming them, can be accessed through the provided link.
Another facet of Michigan’s taxation system is the Essential Services Assessment (ESA), a state-specific tax applicable to eligible personal property owned, leased, or in the possession of a qualifying claimant. This link offers details on ESA, outlining who is obligated to pay it and providing guidance on filing statements and remitting payments. Additionally, the Local Community Stabilization Authority Act, 2014 PA 86, MCL 123.1341 to 1213.1362, facilitates reimbursements to municipalities for operating and debt millages, taking into account declines in personal property taxable value and acquisition costs related to Eligible Manufacturing Personal Property (EMPP).
Furthermore, the Michigan Trust Fund Act, 2000 PA 489, MCL 12.253a, ensures reimbursements to municipalities for lost personal property tax revenue due to Small Business Taxpayer Exemption (SBTE) claims. Taxpayers eligible for SBTE claims are those who own, lease, or possess qualifying personal property with a combined true cash value ranging from $80,000 to less than $180,000. The provision of links to necessary forms for personal property tax payment or exemption application further facilitates compliance with the taxation process.