March 12, 2003, Introduced by Rep. DeRossett and referred to the Committee on Tax Policy.
A bill to amend 1893 PA 206, entitled
"The general property tax act,"
by amending section 9 (MCL 211.9), as amended by 1996 PA 582.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 9. The following personal property is exempt from
2 taxation:
3 (a) The personal property of charitable, educational, and
4 scientific institutions incorporated under the laws of this
5 state. This exemption does not apply to secret or fraternal
6 societies, but the personal property of all charitable homes of
7 the secret or fraternal societies and of
nonprofit corporations
8 that own and operate facilities for the aged and chronically ill
9 in which the net income from the operation of the corporations
10 does not inure to the benefit of a person other than the
11 residents is exempt.
1 (b) The property of all library associations, circulating
2 libraries, libraries of reference, and reading rooms owned or
3 supported by the public and not used for gain.
4 (c) The property of posts of the grand army of the republic,
5 sons of veterans' unions, and of the women's relief corps
6 connected with them, of young men's Christian associations,
7 women's Christian temperance union associations, young people's
8 Christian unions, a boy or girl scout or camp fire girls
9 organization, 4-H clubs, and other similar associations.
10 (d) Pensions receivable from the United States.
11 (e) The property of Indians who are not citizens.
12 (f) The personal property owned and used by a householder
13 such as customary furniture, fixtures, provisions, fuel, and
14 other similar equipment, and
the wearing apparel including
15 personal jewelry, family pictures, school books, library books of
16 reference, and allied items. Personal property is not exempt
17 under this subdivision if it is used to produce income, if it is
18 held for speculative investment, or if it constitutes an
19 inventory of goods for sale in the regular course of trade.
20 (g) Household
furnishings, provisions, and fuel to the state
21 equalized value of not more than $5,000.00 in taxable value,
of
22 each social or professional fraternity, sorority, and student
23 cooperative house recognized by the educational institution at
24 which it is located.
25 (h) The working tools
of a mechanic to the state equalized
26 value of not more than $500.00 in taxable value.
"Mechanic", as
27 used in this subdivision, means a person skilled in a trade
1 pertaining to a craft or in the construction or repair of
2 machinery if the person's employment by others is dependent on
3 his or her furnishing the tools.
4 (i) Fire engines and other implements used in extinguishing
5 fires owned or used by an organized or independent fire company.
6 (j) Property actually
being used in agricultural operations
7 and the farm
implements held for sale or resale by retail
8 servicing dealers for use in agricultural production. As used in
9 this subdivision, "agricultural operations" means farming in all
10 its branches, including cultivation of the soil, growing and
11 harvesting of an agricultural, horticultural, or floricultural
12 commodity, dairying, raising of livestock, bees, fur-bearing
13 animals, or poultry, raising or growing of grains, fruits,
14 vegetables, bedding plants, and nursery stock, turf and tree
15 farming, raising and harvesting of fish, and any practices
16 performed by a farmer or on a farm as an incident to, or in
17 conjunction with, farming operations, but excluding retail sales
18 and food processing operations. Property used in agricultural
19 operations includes machinery used to prepare the crop for market
20 operated incidental to a farming operation that does not
21 substantially alter the form, shape, or substance of the crop and
22 is limited to cleaning, cooling, washing, pitting, grading,
23 sizing, sorting, drying, bagging, boxing, crating, and handling
24 if not less than 33% of the volume of the crops processed in the
25 year ending on the applicable tax day or in at least 3 of the
26 immediately preceding 5 years were grown by the farmer in
27 Michigan who is the owner or user of the crop processing
1 machinery.
2 (k) Personal property
to the state equalized value of not
3 more than $500.00 in taxable value used by a householder in the
4 operation of a business in the householder's dwelling or at 1
5 other location in the city, township, or village where the
6 householder resides.
7 (l) The products, materials, or goods processed or otherwise
8 and in whatever form, but expressly excepting alcoholic
9 beverages, located in a public warehouse, United States customs
10 port of entry bonded warehouse, dock, or port facility on
11 December 31 of each year, if those products, materials, or goods
12 are designated as in
transit to destinations out of outside
13 this state pursuant to the published tariffs of a railroad or
14 common carrier by the
filing of the freight bill covering the
15 products, materials, or goods with the agency designated by the
16 tariffs, so as to
entitle entitling the shipper to
17 transportation rate privileges. Products in a United States
18 customs port of entry bonded warehouse that arrived from another
19 state or a foreign country, whether awaiting shipment to another
20 state or to a final destination within this state, are considered
21 to be in transit and temporarily at rest, and not subject to
22 personal property taxation. To obtain an exemption for products,
23 materials, or goods under this subdivision, the owner shall file
24 a sworn statement with, and in the form required by, the
25 assessing officer of the tax district in which the warehouse,
26 dock, or port facility is located, at a time between the tax day,
27 December 31, and before closing
of the assessing officer closes
1 the assessment rolls by
the assessing officer, describing the
2 products, materials, or goods, and reporting their cost and value
3 as of December 31 of each
year. The status of persons , and
4 products, materials, or goods for which an exemption is requested
5 shall be is determined as of December 31, which shall
be is
6 the tax day. The
assessment on the basis of average monthly
7 inventory does not
apply in valuing products, materials, or goods
8 for which exemption is
requested. Any property located in a
9 public warehouse, dock, or port facility on December 31 of each
10 year , which that
is exempt from taxation under this
11 subdivision but which
that is not shipped outside the this
12 state pursuant to the particular tariff under which the
13 transportation rate
privilege was established , shall be
14 assessed upon the next
immediately succeeding or a subsequent
15 assessment roll by the assessing officer and taxed at the same
16 rate of taxation as other
taxable properties property for the
17 year or years for which
the property was exempted , to the
18 owner at the time of the
omission , unless the owner or person
19 entitled to possession of the products, materials, or goods is a
20 resident of, or authorized to do business in, this state and
21 files with the assessing officer, with whom statements of taxable
22 property are required to be filed, a statement under oath that
23 the products, materials, or goods are not for sale or use in this
24 state and will be shipped to a point or points outside this
25 state. If a person, firm, or corporation claims exemption by
26 the filing of a sworn statement, the person,
firm, or
27 corporation shall append to the statement of taxable property
1 required to be filed in
the next immediately succeeding year
2 or, if a statement of taxable property is not filed for the
3 next immediately succeeding year, to a sworn
statement filed on
4 a form required by the
assessing officer, shall be filed
5 showing a complete list of the property for which the
exemption
6 was claimed with a statement of the manner of shipment and of the
7 point or points to which the products, materials, or goods were
8 shipped from the public
warehouse, dock, or port facility. and
9 The assessing officer shall assess the products, materials, or
10 goods not shipped to a
point or points outside this state shall
11 be assessed upon the next immediately succeeding
assessment
12 roll , or on a
subsequent assessment roll by the assessing
13 officer and the products, materials, or goods shall be
taxed at
14 the same rate of taxation
as other taxable properties property
15 for the year or years for
which the property was exempted , to
16 the owner at the time of the omission. The records, accounts,
17 and books of warehouses, docks, or port facilities, individuals,
18 partnerships, corporations, owners, or those in possession of
19 tangible personal property shall be open to and available for
20 inspection, examination, or auditing by assessing officers. A
21 warehouse, dock, or port
facility, individual, partnership,
22 corporation, owner, or person in possession of tangible personal
23 property shall report within 90 days after shipment of products,
24 materials, or goods in transit, for which an exemption under this
25 section was claimed or granted, the destination of shipments or
26 parts of shipments and the cost value of those shipments or parts
27 of shipments to the
assessing officer. For failure to comply
1 with this requirement,
the A warehouse, dock, or
port
2 facility, individual, partnership, corporation, or owner is
3 subject to a fine of
$100.00 for each omission failure to
4 report the destination and cost value of shipments or parts of
5 shipments as required in this subdivision. A person, firm,
6 individual, partnership, corporation, or owner failing to report
7 products, materials, or goods located in a warehouse, dock, or
8 port facility to the assessing officer is subject to a fine of
9 $100.00 and a penalty of 50% of the final amount of taxes found
10 to be assessable for the year on property not reported, the
11 assessable taxes and penalty to be spread on a subsequent
12 assessment roll in the same manner as general taxes on personal
13 property. For the purpose of this subdivision, a public
14 warehouse, dock, or port facility means a warehouse, dock, or
15 port facility owned or operated by a person, firm, or corporation
16 engaged in the business of storing products, materials, or goods
17 for hire for profit who issues a schedule of rates for storage of
18 the products, materials, or goods and who issues warehouse
19 receipts pursuant to Act
No. 303 of the Public Acts of 1909,
20 being sections 443.50
to 443.55 of the Michigan Compiled Laws
21 1909 PA 303, MCL 443.50 to 443.55. A United States customs port
22 of entry bonded warehouse means a customs warehouse within a
23 classification designated
by 19 C.F.R. 19.1 and which that is
24 located in a port of
entry, as defined by 19 C.F.R. 101.1(m)
25 101.1. A portion of a public warehouse, United States customs
26 port of entry bonded warehouse, dock, or port facility leased to
27 a tenant or a portion of any premises owned or leased or operated
1 by a consignor or consignee or an affiliate or subsidiary of the
2 consignor or consignee shall
is not be considered a public
3 warehouse, dock, or port facility.
4 (m) Personal property owned by a bank or trust company
5 organized under the laws of this state, a national banking
6 association, or an incorporated bank holding company as defined
7 in section 2 of the bank holding company act of 1956,
8 chapter 240, 70 Stat. 133, 12 U.S.C. 1841, that controls a bank,
9 national banking association, trust company, or industrial bank
10 subsidiary located in
this state. However, buildings Buildings
11 owned by a state or national bank, trust company, or incorporated
12 bank holding company and situated upon lands of which the state
13 or national bank, trust company, or incorporated bank holding
14 company is not the owner of the fee are considered real property
15 and are not exempt from
taxation. and personal Personal
16 property owned by a state or national bank, trust company, or
17 incorporated bank holding company that is leased, loaned, or
18 otherwise made available to and used by a private individual,
19 association, or corporation in connection with a business
20 conducted for profit is not exempt from taxation.
21 (n) Farm products, processed or otherwise, the ultimate use
22 of which is for human or animal consumption as food, except wine,
23 beer, and other alcoholic beverages regularly placed in storage
24 in a public warehouse,
dock, or port facility , while in
25 storage are considered in transit and only temporarily at rest
26 , and are not subject to personal property taxation.
The
27 assessing officer is the determining authority as to what
1 constitutes, is defined as, or classified as, farm products as
2 used in this subdivision. The records, accounts, and books of
3 warehouses, docks, or port facilities, individuals, partnerships,
4 corporations, owners, or those in possession of farm products
5 shall be open to and available for inspection, examination, or
6 auditing by assessing officers.
7 (o) Sugar, in solid or liquid form, produced from sugar
8 beets, and dried
beet pulp, and beet molasses , when if owned
9 or held by processors.
10 (p) The personal property of a parent cooperative preschool.
11 As used in this subdivision and section 7z, "parent cooperative
12 preschool" means a nonprofit, nondiscriminatory educational
13 institution maintained as a community service and administered by
14 parents of children currently enrolled in the preschool, that
15 provides an educational and developmental program for children
16 younger than compulsory school age, that provides an educational
17 program for parents, including active participation with children
18 in preschool activities, that is directed by qualified preschool
19 personnel, and that is
licensed by the department of social
20 services under Act No. 116 of the Public Acts of 1973, being
21 sections 722.111 to
722.128 of the Michigan Compiled Laws 1973
22 PA 116, MCL 722.111 to 722.128.
23 (q) All equipment used exclusively in wood harvesting, but
24 not including portable or stationary sawmills or other equipment
25 used in secondary processing operations. As used in this
26 subdivision, "wood
harvesting" means the clearing of land for
27 forest management
purposes, the planting of trees, and all
1 forms of cutting or
chipping of trees, and the loading of
2 them trees on trucks for removal from the harvest
area.
3 (r) Liquefied petroleum gas tanks located on residential or
4 agricultural property and
used to store liquefied petroleum gas
5 for residential or
agricultural property use. As used in this
6 subdivision,
"liquefied petroleum gas" means that term as defined
7 in section 51 of Act
No. 150 of the Public Acts of 1927, being
8 section 207.151 of the
Michigan Compiled Laws.
9 (s) Water conditioning systems used for a residential
10 dwelling.
11 (t) The personal property of a farmers' cooperative if that
12 personal property would be exempt under subdivision (j) if owned
13 by a member of that farmers' cooperative. As used in this
14 subdivision, "farmers' cooperative" means a farmers' cooperative
15 corporation governed by section 98 of 1931 PA 327, MCL 450.98.