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-technology businesses. These abatements can last up to twelve 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.
State Education Tax Abatement: The state can abate half or all of the 6-mill State Education Tax on new investment when the project presents significant economic benefits to Michigan, and when the project receives a property tax abatement under PA 198 of 1974.
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.
State Essential Services Assessment Exemption Program: The State Essential Services Assessment (SESA) is required for manufacturers that do not pay personal property tax on eligible manufacturing personal property. In certain circumstances, the Michigan Strategic Fund may choose to exempt or reduce the SESA for highly competitive projects that create jobs and/or private investment in Michigan through the SESA Exemption Program. This program can eliminate the SESA requirement for up to 15 years.
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 a business must create at least 50 jobs in developed counties or 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.
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 up to a 100% abatement of business personal property taxes. New warehousing, distribution, and logistics facilities can qualify for up to a 50% reduction in real property taxes for up to twelve years. 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.
Good Jobs for Michigan Program: Discretionary incentive program which 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. The State will receive 5% of the employee withholdings benefit in any given year for administrative expenses.
Michigan Community Revitalization Program Guidelines: This program offers financial support via grant, loan, or equity investment to encourage private investment in revitalization and redevelopment of functionally obsolete properties, blighted properties, historic resources, and natural resources of the state. Support for a project will generally not exceed 25% of the total investment and is limited to a maximum per project of $10,000,000. However, the Michigan State Fund has discretion to offer 50% of the total investment in support for up to three project per year. A grant cannot exceed $1,500,000 for any project.