FREQUENTLY ASKED QUESTIONS REGARDING PERSONAL PROPERTY TAXES
WHAT IS PERSONAL PROPERTY?
Personal Property is the tangible (physical) assets of a business. Some common examples are: office furniture, computers, and industrial machinery & equipment, copy & fax machines. Personal Property should not be confused with Real Property, which is the land and building.
HOW ARE THE ASSESSED & TAXABLE VALUES DETERMINED?
The assessed & taxable values are calculated by the timely filing of a completed personal property statement.
WHERE DOES THE TAX MONEY COLLECTED GO?
Washtenaw County, Scio Township and/or the Village of Dexter, Ann Arbor or Dexter Schools, State Education Fund, Washtenaw Intermediate Schools, Washtenaw Community College, Ann Arbor or Dexter Library. Essentially, personal property tax money goes to the same entities as real property taxes.
I’VE HEARD THAT THE STATE OF MICHIGAN ENACTED A NEW LAW WHICH MEANS I COULD BE PAYING LOWER PERSONAL PROPERTY TAXES. WHAT IS THAT?
The State of Michigan enacted Public Acts 37, 38, 39 & 40 of 2007, which provide for the exemption of certain taxes, based on the classification of the personal property. For industrial classified personal property, those taxes exempted would be the 6 mill State Education Tax & up to 18 mills of local school district operating millage. On commercial classified property, the exemption would be up to 12 mills of local school district operating millage. Properties classified as utility personal did not change and continue to be charged at the non-homestead tax rates.
HOW CAN I BE SURE I AM PAYING AT THE CORRECT TAX RATE?
On your tax bill, it will state your business’ classification as INDUSTRIAL PERSONAL (class number 351), COMMERCIAL PERSONAL (class number 251) or UTILITY PERSONAL (class 551). That would be your business’ classification.
HOW IS THE BUSINESS’ CLASSIFICATION DETERMINED?
The classification is determined by the nature of the business, not by the classification of the real property parcel that the business is located on. It is possible to have a commercially classified business (personal) located on an industrial classified (real) parcel, or vice versa.
WHAT HAPPENS IF PERSONAL PROPERTY TAXES BECOME DELINQUENT?
The non-payment of personal property taxes could result in seizure of the personal property. The Treasurer is authorized to seize and sell personal property of a business if personal property taxes remain unpaid.
WHAT HAPPENS IF MY BUSINESS MOVES OUT OF SCIO TOWNSHIP DURING THE YEAR?
December 31st is tax day in the State of Michigan. Unlike real property where taxes are prorated at the time of sale, a personal property tax is due for the entire calendar year. For example, if your business moves out of the township on any day during the calendar year following tax day (December 31st), you, as a business owner, are still liable for the personal property tax for the remainder of the calendar year.
Personal property taxes would be due to the City or Township your business re-locates to the following year. Your business cannot be taxed a personal property tax by two jurisdictions in the same year.
I SOLD/PURCHASED MY BUSINESS WITHIN THE PAST YEAR. WHO IS LIABLE FOR THIS PERSONAL PROPERTY TAX BILL?
There is no proration of personal property taxes. It is between the purchaser and seller of the business as to who is responsible for the payment of the tax. The Township does not get involved in such disputes. The entire tax must be paid or there is a risk of the forfeiture of personal property.
WHO SAYS I HAVE TO FILE A PERSONAL PROPERTY STATEMENT?
The Michigan Constitution provides for assessment of all real and personal property not exempted by law.
WHERE AND HOW OFTEN DO I HAVE TO FILE A PERSONAL PROPERTY STATEMENT?
Personal Property statements are filed annually with the jurisdiction that the personal property was located in on December 31st. Personal Property statements are mailed during the last week of December and must be completed, signed and returned by February 20th.
WHAT HAPPENS IF I DO NOT FILE A PERSONAL PROPERTY STATEMENT?
If the personal property statement is not returned by the February 20th deadline, by law, the Assessor is required to estimate an assessed value.
WHAT TYPE OF INFORMATION DO I INCLUDE ON THE PERSONAL PROPERTY STATEMENT?
The total original installed costs for each item of personal property by the year of purchase.
WHAT IF SOME OF MY PERSONAL PROPERTY IS USED EQUIPMENT?
If an item was purchased used, you must report the original cost of the item in the year it was purchased AS NEW. Do not report the cost you paid for the item as used. (You may have to contact the seller for original cost information).
MY ACCOUNTANT HAS FULLY EXPENSED SOME ITEMS OF PERSONAL PROPERTY. HOW DO I REPORT THAT?
If you have personal property that has been fully expensed or depreciated for Federal Income Tax or financial accounting purposes, the original cost in the year purchased MUST continue to be reported on your personal property statement.
I DISPOSED OF SOME PREVIOUSLY REPORTED PERSONAL PROPERTY ITEMS. HOW DO I REPORT THAT?
When you sell or get rid of an item of personal property, the original cost of the item should not be included on your statement when you file the following year.
DO I REPORT EQUIPMENT THAT I AM LEASING?
Yes. This equipment should be reported on Section J of your personal property statement. Be sure to include the type of equipment, leasing company name and mailing address.
I LEASE SPACE MY BUSINESS OCCUPIES. DO I HAVE TO PAY A PERSONAL PROPERTY TAX?
Yes. Personal Property is a tax on the physical (tangible) assets of the business, not the structure or building itself. Therefore, the owner of the business, not the owner of the building, is assessed a personal property tax.
I OPERATE A BUSINESS OUT OF MY HOME. DO I HAVE TO PAY A PERSONAL PROPERTY TAX?
Yes. Regardless of where the business is located, if a business is situated within Scio Township, it is subject to a personal property tax. However, if you are the sole proprietor of that business, you may qualify for a partial exemption of the personal property tax.
WHAT ARE MY RESPONSIBILITIES AS A BUSINESS OWNER?
You must notify your local Assessor’s Office when your business moves into or out of the township. Also, if you anticipate purchasing a business, make sure that the seller has paid the personal property taxes. The tax bills may be in the name of the old business, but the tax lien on the personal property remains. Therefore, the personal property may be seized to pay delinquent personal property taxes even though you may be the new business owner.
(7/09)
SCIO TOWNSHIP
827 N. Zeeb Road• Ann Arbor, MI 48103
734-369-9400 • 734-665-0825 (fax)
www.twp.scio.mi.us
