Personal property tax hearings begin in Senate Finance Committee
LANSING— The Senate Finance Committee held the first of what will be many hearings on Personal Property Tax (PPT) reform on Wednesday, said Chairman Jack Brandenburg.
“I was happy to see such a large group of people attend our first hearing,” said Brandenburg, R-Harrison Township. “We heard testimony both in support of and in opposition to business PPT reform; and many different ideas were shared. I look forward to more discussion in the coming weeks and months.”
Lt. Gov. Brian Calley was the first person to testify before the committee and laid out why business PPT reform is necessary. He also gave a breakdown of the key components of the legislation.
“I would like to thank the lieutenant governor for taking the time to attend the committee meeting and for taking a leadership role on business PPT reform,” said Brandenburg.
Those who testified in opposition to business PPT were concerned about how revenue lost by local units of government would be replaced.
Senate Bill 1072, sponsored by Brandenburg, addresses the problem of how revenue will be replaced. Under the measure, beginning in 2016, the Department of Treasury is required to prepare an estimate for each category of political subdivision (e.g. counties, cities, townships,) of revenue lost in that fiscal year as a result of the proposed exemptions.
Brandenburg’s legislation also instructs the legislature to send at minimum the amount recommended by the Treasury department to each governmental entity. The Legislature may then allocate any additional funds they see fit.
“Many of the changes in this package of legislation do not take place effect until 2016, which is when the MEGA and battery tax credits expire,” said Brandenburg. “The expiration of these credits will mean that the state will be receiving more tax dollars. A portion of the increased tax revenue will be placed in a fund to help replace personal property tax revenue; local officials will then decide how the money should be distributed.”
“This is a complex piece of legislation with lots of moving parts, which is why we plan to have multiple hearings,” said Brandenburg. “However, I firmly believe that once business PPT reform is put into place Michigan will benefit from a better business environment, leading to increased investment and economic activity, a growing tax base and more jobs.”