Senate approves Green bill to reduce tax burden on ag-related machinery

LANSING, Mich.–Machinery used to install or implement soil and water conservation techniques in agriculture applications would be exempted from personal property tax assessments under legislation approved by the Michigan Senate on Thursday.

“This bill fixes an oversight in existing law, making it clear that equipment used for agriculture conservation efforts should be exempt from the personal property tax, like all other farming equipment,” said bill sponsor Sen. Mike Green, R-Mayville. “This will help reduce the tax burden and promote private soil and water conservation in Michigan.”

It is common for machinery to be used both in agricultural and non-agricultural applications and, as a result, situations arise where items are either exempted from the Personal Property Tax (PPT) too much or not at all. Because the PPT relies on self-reporting, it is vital to have clear definitions for tax-exempted items, which Senate Bill 563 helps to do by specifying multi-purpose machinery exemptions based on the percentage of time the machinery is used for agricultural operations.

While reducing the tax burden on equipment owners, the impact on local government revenue will likely be negligible, according to a non-partisan analysis.  Any reductions to schools will be made up by the state School Aid fund.

SB 563, which enjoys support from the Michigan Farm Bureau, passed the Senate by a vote of 34-1 and now goes to the state House for approval.