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Michigan Farm Bureau Family of Companies

Taxation #94

Property Tax/Assessing

Agricultural property in Michigan is taxed at 50 percent above the national average, which is a significant cost.

We support:

  • Lowering or eliminating agricultural property taxes in Michigan.

  • Development of legislation allowing landowners to voluntarily enroll in a program that reduces assessments on farm buildings by up to 100 percent of their current taxable value and assesses farmland, including managed woodlots/forestland, with a goal of reaching a property tax rate of $5-7 per acre. Voluntary enrollment in the program, open to every farmer, would be in exchange for temporary/long-term preservation of farmland for a contract period of approximately 20 years or more with a recapture penalty for early withdrawal or when property changes out of agricultural use.

  • Legislation requiring assessments on farm structures to align with the current use of the structure.

  • PA 162 of 2013 which states sales of agricultural land without a qualified agricultural affidavit on file will not be used in the sales studies for agricultural land.

  • Development of taxation methods to more fairly distribute municipal service costs.

  • Legislation to put an end to the "dark store" assessing theory, ensuring equitable, fair determinations on property tax appeal cases before the Michigan Tax Tribunal.

  • All agricultural single purpose structures, such as greenhouses, grain bins and silos, be assessed using a realistic accelerated depreciation schedule considering the current practical use of the structure.

  • A clarification that all temporary agricultural structures, which are moveable and not permanently attached or anchored to the ground, be exempt from sales and use taxes as referenced in Revenue Administrative Bulletin 2002-15 of June 2002.

  • The Qualified Forest Property program which exempts the pop-up tax and provides a 16 mill exemption, as long as the new owner agrees to keep up the qualified forest land agreement.

  • A significantly reduced tax designation or tax exempt status for land which is designated for mandatory restricted use such as wetlands, filter strips, sand dunes, natural or scenic rivers, or other restrictions on private property.

  • The retention of the right of local governing units to assess property for taxation purposes.

  • The qualified agricultural exemption shall remain in effect if the Governor or USDA issues a disaster declaration for the county.

  • The continued use of tax abatements and Renaissance Zones to encourage the development and expansion of agricultural facilities to enhance value-added opportunities for agriculture.

  • Legislation that would allow a farm to include all parcels of the farming operation together when determining the ag classification. If the total farm would qualify for PA 116, then all parcels should maintain their ag classification. Non-contiguous parcels are being reclassified to residential unless 51 percent of the parcel is farmed. Property in Northwest Michigan, and possibly in other parts of the state, cannot be farmed at 51 percent because of the topography.

  • Exempting PA 116 land from all special assessments excluding agricultural drainage.

  • Local units of government classifying equine therapy facilities, therapeutic riding facilities, equine rehabilitation facilities, and other similar equine-related businesses utilizing horses as the major component of their business as agriculture for property tax purposes.

  • The continuation of Proposal A in its current form, as it pertains to agriculture.

  • The change to the summer tax collection which provided for a lifetime deferment of summer tax for qualified agricultural land if the owner files a federal Schedule “F” Income Tax Form or comparable farm income tax filing.

  • The time frame for qualified agriculture property be a period of three years between the start of delinquent status to the expiration of redemption rights. We believe the private individual should have the first option to redeem delinquent property.

  • All assessors should follow established procedures and change the classification from agricultural to industrial and use the appropriate tax tables when considering property that changed from agriculture to commercial solar electric production. 

We oppose:

  • Assessing occupied business structures as though they were vacant.

  • The reduction of taxes levied on state-owned land below current levels.

  • The reclassification of agriculture and forest land to a residential classification when no residential structure exists.

Income Tax/Incentives

We support:

  • Deferment of crop insurance income to the year following the crop insurance payment to align with federal rules.

  • Tax credits used to create jobs and tax equity for the agricultural economy.

  • The concept of a beginning farmer tax credit program.

  • The State of Michigan providing tax incentives rather than tax the production, distribution or sale of renewable energy or fuel including but not limited to wood, cherry pits, biodiesel, ethanol, methane digester power, geo and hydro power, as well as windmill and solar power. If the majority of the energy is used for onsite purposes, the generation of the energy and associated equipment should be tax exempt.

  • Using federal adjusted gross income (AGI) as the base for Michigan’s income tax calculation and oppose decoupling for items such as accelerated depreciation and expensing rules (Sec. 179).

  • Allowing a surviving spouse who has not remarried to continue to use the age of the deceased spouse for the purpose of the determination of qualification for pension subtraction from income.

  • Allowing for a line item tax deduction for primary education (preschool-grade 12) expenses, such as tuition and teaching materials.

We oppose:

  • Reinstatement of the Michigan estate tax (often referred to as the death tax).

  • Any effort to tax farmer-owned cooperatives on disbursements or credits that are taxable in the hands of patrons.

County/State Taxes

We support:

  • PA 283 of 1909 (MCL section 224.20) be revised to indicate that all new monies generated by county boards of commissioners must be placed on the ballot in a millage election and levied only after receiving the approval of the majority of the voters.

  • The sale of state land to meet its obligations, and return the land to private ownership and the property tax roll.

Sales and Use Tax

We support:

  • The agriculture exemption from state sales and use tax based upon the use of the product.

  • A continuation of the agriculture sales tax exemption for the equine industry.

  • Supporters of the FAIR Tax providing education and analyzing the proposal’s impacts and benefits on agriculture.

We oppose:

  • Charging state sales tax on the federal manufacturers excise tax.

  • Sales tax levied on new vehicles before cash back, manufacturer incentives and rebates.

  • Sales tax levied on the sale of used vehicles.

  • Any plan which places an undue or unrealistic tax or fee which affects agriculture, such as a tax on gross receipts, a tax on personal property or a tax on assets.

  • Any tax on food or food additives including so called “sin taxes” on products like processed sugar.

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