Michigan Business Development Program (MBDP): The discretionary program provides performance-based grants, low interest loans, and other assistance to support business attraction and expansion projects that involve capital investment and/or new job creation. To qualify as job creation project, a business must create at least 50 jobs. The minimum job creation requirement is reduced to 25 jobs if the project is located in a rural county or qualifies as a high-technology activity. The maximum amount of funding that may be provided to a project cannot exceed $10 million.
Good Jobs for Michigan Incentive Program: Passed in July 2017, this new discretionary incentive program allows for businesses to retain up to 100% of new employee withholding taxes for a period of up to 10 years (the 2017 employee withholding rate in Michigan is 4.25%). The program’s requirements and benefits are as follows:
The State can approve up to 15 projects per year (with an annual rollover), and the total authorized amount of retained new employee withholdings under the program overall is limited to $200 million (although no annual funding targets have not been established, as of this writing). The State has not yet issued regulations for the incentive program, potentially creating uncertainties for companies in the process of making competitive location decisions.
Border County Incentives: Businesses that locate in one of 14 counties that border another state or Canada may receive full or partial tax abatements through a partnership between the State of Michigan and local municipalities. Eligible businesses may receive a 100% abatement of business personal property taxes. New warehousing, distribution, and logistics facilities can qualify for a 50% reduction in real property taxes.
Renaissance Zones: Businesses that locate in Renaissance Zones are exempt from the state education tax, business personal property tax and real property taxes.
Michigan Works!: Provides workforce development assistance to companies in the form of candidate identification and screening, training grants and programs, and internships/co-ops.
Sales Tax Exemptions: Manufacturing machinery and equipment, pollution control equipment and electricity and natural gas used in production are all exempt from sales tax.
PA 198 Property Tax Abatement: Local units of government have the ability to reduce property taxes on new investment by 50% for manufacturers and high-tech businesses. These abatements can last up to 12 years and can provide relief on both real and personal property taxes. Businesses approved for a PA 198 abatement can also receive an exemption of the 6-mill State Education Tax.
Personal Property Tax Reform: Michigan is phasing out its Personal Property Tax for most businesses. Eligible manufacturing personal property includes all personal property located on real property where that personal property is used more than 50% of the time in industrial processing or in supporting industrial processes.
Last updated: September 2017