Mayes Introduces Plan to Extend Tax Breaks for Leased Property
Bay City Lawmaker Looks To Address Inequity Between Leased, Owned Property
May 1, 2009
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By: MyBayCity Staff
State Representative Jeff Mayes (D-Bay City) this week introduced a plan that will provide the same tax breaks for leased property as currently exist for the ownership of industrial personal property. The plan would affect both the property taxes these companies pay and their Michigan Business Tax (MBT) liability.
"We all read the headlines, and the struggles Michigan businesses have faced in this economic downturn," Mayes said. "We need to give Michigan companies every chance to succeed. Under my plan, we would give the same tax incentives to lease property as those that currently exist to purchase it, which will benefit companies that primarily lease goods."
Mayes' plan would include leased machinery, equipment, furniture, fixtures and dyes located on industrial parcels in the definition of "industrial personal property" in the MBT, which qualifies for a 24-mill property tax abatement and a 35 percent credit of the remaining tax liability. The plan also will allow lessees to qualify for MBT credits that are currently only available to property owners.
Under the current tax structure, companies have a strong incentive to purchase equipment, rather than lease. The legislation would attempt to provide equivalent treatment for both ownership and leasing of property, removing an artificial distinction between the two and allowing lessees to more effectively compete.
"One of my top priorities is creating a more favorable business climate that will attract new companies to Michigan and the Bay City area," Mayes said. "By making these common-sense reforms to our tax code, we'll create jobs and take a key step on the road to economic recovery."
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