91.7 Ann Arbor/Detroit 104.1 Grand Rapids 91.3 Port Huron 89.7 Lansing 91.1 Flint
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Personal property tax proposal spurs debate

The Michigan Small Business Tax isn’t the only tax getting attention right now: A lawmaker from Battle Creek wants to eliminate the personal property tax that businesses pay.

State Sen. Mike Nofs, R-Battle Creek, says Michigan doesn’t create a very welcoming climate for business.

Nofs wants to get rid of a tax that businesses pay on things like equipment and furniture.

Michigan’s current personal property tax is based on a community’s millage, and generates revenue for local governments.

"If they want to buy new equipment, to be able to produce their product cheaper and more efficiently -- which is what we want, so they stay in business -- we turn around then, after they buy this new machinery, and we send them a tax bill as a thank-you note," Nofs says. "It's not good."

Warren Mayor James Fouts says eliminating the personal property tax would have a huge negative impact on Michigan cities.

"You can't just get rid of all tax revenue and expect the cities to go on as they are," Fouts warns. "The cities will cease to be. They will become unsafe, unfriendly places in which people will avoid living because we can't offer the basic necessities."

Fouts says Warren could lose more than $11 million a year if the personal property tax on business is eliminated.

Sen. Nofs admits it would be a blow to municipal budgets, but he says a more business-friendly environment would make up for it by keeping businesses in Michigan and generating jobs.

Nofs says he’s open to the idea of phasing the personal  property tax out gradually, such as over 10 years.