State Representative Andy Schor (D-Lansing) applauded House approval of House Bill 4580, which would allow a local government to revoke a personal property tax exemption if the agreed-upon contact is not honored by the recipient business. All other local tax abatements have revocation provisions, but Public Act 328 (which allows for up a personal property tax exemption of up to 100 percent) does not include a revocation provision.
“Cities, townships and other local governments generally support businesses who create jobs and help the local economy in their community by offering tax abatements. But when a business fails to meet their part of the contract, the local government should be withdraw its offer to reduce the taxes of that business.” Schor said. “Passage of this bill through the House is the first step to ensuring that both businesses and locals will come through on their commitments to job creation and economic benefits to their communities.”
This bill is the result of a situation recently in Lansing where a business did not honor the terms of a contract with the city, but the Michigan Tax Tribunal ruled that the city could not revoke the abatement due to a deficiency in the law creating the personal property tax abatement (PA 328). HB 4580 was amended in committee to ensure that there is a signed contract agreement before revocation can happen, and was amended to prevent this new law from being retroactive.
“Our local government officials are stewards of our tax dollars. If they agree to forego taxes, then there should be a benefit to that community. If a business promises something in writing, and doesn’t come through on that promise to the community, the elected officials should be able to revoke the abatement,” Schor said. “I look forward to the swift movement of this bill through the Senate and to the governor’s desk, as we need this protection for our communities and tax dollars.”