January 27, 2005, Introduced by Rep. Hansen 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 2003 PA 140.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 9. The following personal property is exempt from
taxation:
(a) The personal property of charitable, educational, and
scientific institutions incorporated under the laws of this state.
This exemption does not apply to secret or fraternal societies, but
the personal property of all charitable homes of secret or
fraternal societies and nonprofit corporations that own and operate
facilities for the aged and chronically ill in which the net income
from the operation of the nonprofit corporations or secret or
fraternal societies does not inure to the benefit of a person other
than the residents is exempt.
(b) The property of all library associations, circulating
libraries, libraries of reference, and reading rooms owned or
supported by the public and not used for gain.
(c) The property of posts of the grand army of the republic,
sons of veterans' unions, and of the women's relief corps connected
with them, of young men's Christian associations, women's Christian
temperance union associations, young people's Christian unions, a
boy or girl scout or camp fire girls organization, 4-H clubs, and
other similar associations.
(d) Pensions receivable from the United States.
(e) The property of Indians who are not citizens.
(f) The personal property owned and used by a householder such
as customary furniture, fixtures, provisions, fuel, and other
similar equipment, wearing apparel including personal jewelry,
family pictures, school books, library books of reference, and
allied items. Personal property is not exempt under this
subdivision if it is used to produce income, if it is held for
speculative investment, or if it constitutes an inventory of goods
for sale in the regular course of trade.
(g) Household furnishings, provisions, and fuel of not more
than $5,000.00 in taxable value, of each social or professional
fraternity, sorority, and student cooperative house recognized by
the educational institution at which it is located.
(h) The working tools of a mechanic of not more than $500.00
in taxable value. "Mechanic", as used in this subdivision, means a
person skilled in a trade pertaining to a craft or in the
construction or repair of machinery if the person's employment by
others is dependent on his or her furnishing the tools.
(i) Fire engines and other implements used in extinguishing
fires owned or used by an organized or independent fire company.
(j) Property actually used in agricultural operations and farm
implements held for sale or resale by retail servicing dealers for
use in agricultural production. As used in this subdivision,
"agricultural operations" means farming in all its branches,
including cultivation of the soil, growing and harvesting of an
agricultural, horticultural, or floricultural commodity, dairying,
raising of livestock, bees, fur-bearing animals, or poultry,
raising or growing of grains, fruits, vegetables, bedding plants,
and nursery stock, turf and tree farming, raising and harvesting of
fish, and any practices performed by a farmer or on a farm as an
incident to, or in conjunction with, farming operations, but
excluding retail sales and food processing operations. Property
used in agricultural operations includes machinery used to prepare
the crop for market operated incidental to a farming operation that
does not substantially alter the form, shape, or substance of the
crop and is limited to cleaning, cooling, washing, pitting,
grading, sizing, sorting, drying, bagging, boxing, crating, and
handling if not less than 33% of the volume of the crops processed
in the year ending on the applicable tax day or in at least 3 of
the immediately preceding 5 years were grown by the farmer in
Michigan who is the owner or user of the crop processing machinery.
(k) Personal property of not more than $500.00 in taxable
value used by a householder in the operation of a business in the
householder's dwelling or at 1 other location in the city,
township, or village in which the householder resides.
(l) The products, materials, or goods processed or otherwise
and in whatever form, but expressly excepting alcoholic beverages,
located in a public warehouse, United States customs port of entry
bonded warehouse, dock, or port facility on December 31 of each
year, if those products, materials, or goods are designated as in
transit to destinations outside this state pursuant to the
published tariffs of a railroad or common carrier by filing the
freight bill covering the products, materials, or goods with the
agency designated by the tariffs, entitling the shipper to
transportation rate privileges. Products in a United States customs
port of entry bonded warehouse that arrived from another state or a
foreign country, whether awaiting shipment to another state or to a
final destination within this state, are considered to be in
transit and temporarily at rest, and not subject to the collection
of taxes under this act. To obtain an exemption for products,
materials, or goods under this subdivision, the owner shall file a
sworn statement with, and in the form required by, the assessing
officer of the tax district in which the warehouse, dock, or port
facility is located, at a time between the tax day, December 31,
and before the assessing officer closes the assessment rolls
describing the products, materials, or goods, and reporting their
cost and value as of December 31 of each year. The status of
persons and products, materials, or goods for which an exemption is
requested is determined as of December 31, which is the tax day.
Any property located in a public warehouse, dock, or port facility
on December 31 of each year that is exempt from taxation under this
subdivision but that is not shipped outside this state pursuant to
the particular tariff under which the transportation rate privilege
was established shall be assessed upon the immediately succeeding
or a subsequent assessment roll by the assessing officer and taxed
at the same rate of taxation as other taxable property for the year
or years for which the property was exempted to the owner at the
time of the omission unless the owner or person entitled to
possession of the products, materials, or goods is a resident of,
or authorized to do business in, this state and files with the
assessing officer, with whom statements of taxable property are
required to be filed, a statement under oath that the products,
materials, or goods are not for sale or use in this state and will
be shipped to a point or points outside this state. If a person,
firm, or corporation claims exemption by filing a sworn statement,
the person, firm, or corporation shall append to the statement of
taxable property required to be filed in the immediately succeeding
year or, if a statement of taxable property is not filed for the
immediately succeeding year, to a sworn statement filed on a form
required by the assessing officer, a complete list of the property
for which the exemption was claimed with a statement of the manner
of shipment and of the point or points to which the products,
materials, or goods were shipped from the public warehouse, dock,
or port facility. The assessing officer shall assess the products,
materials, or goods not shipped to a point or points outside this
state upon the immediately succeeding assessment roll or on a
subsequent assessment roll and the products, materials, or goods
shall be taxed at the same rate of taxation as other taxable
property for the year or years for which the property was exempted
to the owner at the time of the omission. The records, accounts,
and books of warehouses, docks, or port facilities, individuals,
partnerships, corporations, owners, or those in possession of
tangible personal property shall be open to and available for
inspection, examination, or auditing by assessing officers. A
warehouse, dock, port facility, individual, partnership,
corporation, owner, or person in possession of tangible personal
property shall report within 90 days after shipment of products,
materials, or goods in transit, for which an exemption under this
section was claimed or granted, the destination of shipments or
parts of shipments and the cost value of those shipments or parts
of shipments to the assessing officer. A warehouse, dock, port
facility, individual, partnership, corporation, or owner is subject
to a fine of $100.00 for each failure to report the destination and
cost value of shipments or parts of shipments as required in this
subdivision. A person, firm, individual, partnership, corporation,
or owner failing to report products, materials, or goods located in
a warehouse, dock, or port facility to the assessing officer is
subject to a fine of $100.00 and a penalty of 50% of the final
amount of taxes found to be assessable for the year on property not
reported, the assessable taxes and penalty to be spread on a
subsequent assessment roll in the same manner as general taxes on
personal property. For the purpose of this subdivision, a public
warehouse, dock, or port facility means a warehouse, dock, or port
facility owned or operated by a person, firm, or corporation
engaged in the business of storing products, materials, or goods
for hire for profit who issues a schedule of rates for storage of
the products, materials, or goods and who issues warehouse receipts
pursuant to 1909 PA 303, MCL 443.50 to 443.55. A United States
customs port of entry bonded warehouse means a customs warehouse
within
a classification designated by 19 C.F.R. CFR 19.1 and that
is
located in a port of entry, as defined by 19 C.F.R. CFR 101.1.
A portion of a public warehouse, United States customs port of
entry bonded warehouse, dock, or port facility leased to a tenant
or a portion of any premises owned or leased or operated by a
consignor or consignee or an affiliate or subsidiary of the
consignor or consignee is not a public warehouse, dock, or port
facility.
(m) Personal property owned by a bank or trust company
organized under the laws of this state, a national banking
association,
or an incorporated bank holding company as defined in
section
2 of the bank holding company act of 1956, chapter 240, 70
Stat.
133, 12 U.S.C. 1841 12 USC
1841, that controls a bank,
national banking association, trust company, or industrial bank
subsidiary located in this state. Buildings owned by a state or
national bank, trust company, or incorporated bank holding company
and situated upon lands of which the state or national bank, trust
company, or incorporated bank holding company is not the owner of
the fee are considered real property and are not exempt from
taxation. Personal property owned by a state or national bank,
trust company, or incorporated bank holding company that is leased,
loaned, or otherwise made available to and used by a private
individual, association, or corporation in connection with a
business conducted for profit is not exempt from taxation.
(n) Farm products, processed or otherwise, the ultimate use of
which is for human or animal consumption as food, except wine,
beer, and other alcoholic beverages regularly placed in storage in
a public warehouse, dock, or port facility while in storage are
considered in transit and only temporarily at rest and are not
subject to personal property taxation. The assessing officer is the
determining authority as to what constitutes, is defined as, or
classified as, farm products as used in this subdivision. The
records, accounts, and books of warehouses, docks, or port
facilities, individuals, partnerships, corporations, owners, or
those in possession of farm products shall be open to and available
for inspection, examination, or auditing by assessing officers.
(o) Sugar, in solid or liquid form, produced from sugar beets,
dried beet pulp, and beet molasses if owned or held by processors.
(p) The personal property of a parent cooperative preschool.
As used in this subdivision and section 7z, "parent cooperative
preschool" means a nonprofit, nondiscriminatory educational
institution maintained as a community service and administered by
parents of children currently enrolled in the preschool, that
provides an educational and developmental program for children
younger than compulsory school age, that provides an educational
program for parents, including active participation with children
in preschool activities, that is directed by qualified preschool
personnel, and that is licensed under 1973 PA 116, MCL 722.111 to
722.128.
(q) All equipment used exclusively in wood harvesting, but not
including portable or stationary sawmills or other equipment used
in secondary processing operations. As used in this subdivision,
"wood harvesting" means clearing land for forest management
purposes, planting trees, all forms of cutting or chipping trees,
and loading trees on trucks for removal from the harvest area.
(r) Liquefied petroleum gas tanks located on residential or
agricultural property used to store liquefied petroleum gas for
residential or agricultural property use.
(s) Water conditioning systems used for a residential
dwelling.
(t) For taxes levied after December 31, 2000, aircraft
excepted from the registration provisions of the aeronautics code
of the state of Michigan, 1945 PA 327, MCL 259.1 to 259.208, and
all other aircraft operating under the provisions of a certificate
issued
under 14 C.F.R. CFR part 121, and all spare parts for such
aircraft.
(u) The personal property of a farmers' cooperative if that
personal property would be exempt under subdivision (j) if owned by
a member of that farmers' cooperative. As used in this subdivision,
"farmers' cooperative" means a farmers' cooperative corporation
governed by section 98 of 1931 PA 327, MCL 450.98.