Purchase of real property in Michigan is fully deductible in the year of purchase. The value of these deductions can be carried forward for up to 10 years. Deductions and credits significantly reduce the tax burden, including that of small and low-profit businesses. More businesses are sure to be exempt with the higher filing threshold. Eligible small businesses may pay an alternative 2 percent tax on adjusted business income.
Localities levy taxes for local governmental operations.
The taxable value of property is 50 percent of the current market value. Both real and personal property are subject to taxation. Exemptions from property taxes include inventory, special tools, dies, jigs and most pollution abatement equipment. A key advantage in Michigan is property tax abatements, available for up to 12 years. They reduce liability on buildings, machinery and equipment by 50 percent for new facilities and by 100 percent of the new value of rehabilitated existing property.