Tax incentives don't give money to an investor, rather they serve to facilitate new revenue into the township whether it is through, new investment, wealth creation or job creation and retention.
For more information on any of the programs listed below or to get the process started, contact the township today for more information. The Planning and Zoning Department can be reached at (586) 726-7248 or contact the Assessing Department at (586) 731-5910.
State of Michigan tax incentives
Industrial Development Districts & Plant Rehabilitation - PA 198 of 1974 - Property Tax Abatement
What - PA 198 allows for the abatement of taxes on manufacturing and high-technology related investment in the city. The incentive is available for improvements to buildings and structures (real property), as well as the purchase of machinery and equipment (personal property). The abatement is for a period up to 12 years.
The incentive involves a two part process: 1) the creation of a Plant Rehabilitation or Industrial Development District, 2) the approval of an Industrial Facility Tax Certificate.
Upon issuance of an Industrial Facility Tax Certificate for a new project, within a Plant Rehabilitation or Industrial Development District, the company pays an abated Industrial Facilities Tax (IFT) on the new qualified investment, which is approximately 50% of the standard millage rate. The exemption applies only to the specific project that is the subject of the application. Any buildings and equipment that existed prior to construction of the new facility or are not specified on the application are not exempt. The incentive only abates taxable value on new improvements to the structural portion of a property, and new personal property added within the district. Personal property (i.e. equipment) that is currently being taxed anywhere within the state cannot receive the abatement.
If the project is rehabilitation of real property, the value of any preexisting obsolete property (as determined by a level 3 or 4 Assessor) is exempt from ad valorem property taxes but will be used as the base for the Industrial Facilities Tax.
Who - Eligible businesses include manufacturing plants, and related facilities such as office, engineering, and research and development. As well as, high-technology business operations such as advance computing, advanced materials, bio-technology, and information technology.
Why - PA 198 is used to encourage the creation and / or expansion of manufacturing and high technology business operations. The incentive is to assist companies in making significant investment and creating job opportunities within the city. It abates revenue that would not exist if not for the use of the incentive, leaving at least half of the new revenue on the tax rolls.
Cash Value of New Equipment = $1,000,000
Building Redevelopment Costs = $2,000,000
New Taxable Value Added = $1,500,000
(assumes 50% of true cash value of improvements and equipment)
Est. Tax Savings over 12 Years = $580,000
(estimate does not include depreciation of equipment)
Personal Property Tax Abatement - PA 328 of 1998
What - PA 328 allows for the abatement of all taxes on new personal property investments in the city. The exemption includes only new personal property not previously subject to taxes in the state of Michigan. The length of the abatement is negotiable based on investment, job creation, and economic impact.
Who - Eligible businesses include: manufacturing, mining, research and development, wholesale trade and office operations. It is only available to businesses that locate within a distressed core community like the city of Lansing.
Why - PA 328 is used to encourage the creation and / or expansion of manufacturing, high technology, and business operations. The incentive is to assist companies in making significant investment and creating job opportunities within the city.
The Lansing EDC is approached by a company with patented technologies derived from research at Michigan State University, and they are looking for their first manufacturing facility to begin commercial production of their product. However, being a new company, most likely running on venture capital, they are attracted to locating in a township to save on their tax liability. Yet, the building and the work force in the city are clearly advantageous to business growth. The LEDC utilizes a P.A. 328 for 12 years to offset 100% of the company's personal property tax liability on the new equipment and secure the company in the location that is most advantageous for business growth.
Cash Value of New Equipment: $2,000,000
Estimated Tax Savings over 12 Years: $63,000 (assumes 50% of true cash value of improvements)