If your business owns equipment, furniture, machinery, or other tangible assets in Michigan, you owe the state’s personal property tax on those items unless you qualify for an exemption — and you have to file paperwork with your local assessor by February 20 every year to report what you own or to claim the exemption. The Michigan personal property tax applies separately from real estate tax, uses a December 31 snapshot date, and offers meaningful relief for small businesses and manufacturers who file the right form on time.
What Property Is Taxed
Michigan’s General Property Tax Act covers tangible personal property that isn’t otherwise exempt. For a typical business, that means the physical assets used in operations: machinery, tools, computers, office furniture, shelving, display cases, and similar equipment. Land and buildings are taxed separately as real property and don’t appear on personal property forms.
The date that matters is December 31 of the prior year. Whatever assessable property you own or possess on that date sets what you owe for the following tax year. Assessors calculate the tax from “true cash value,” which Michigan law defines as the usual selling price at the property’s location. In practice, they apply depreciation schedules published by the State Tax Commission based on the asset type and its years in service. If heavy use, obsolescence, or damage makes your equipment worth less than the schedule suggests, that’s grounds for an appeal.
How to File
Every business with assessable personal property in Michigan must file with the local assessor by February 20 each year. Which form depends on what you own.
Most commercial businesses file Form 632, the Personal Property Statement. It asks for a description of each asset, its acquisition date, and its purchase price. If the predominant use of the property on a parcel is industrial processing or direct integrated support, you file Form 5278 instead. Both forms share the February 20 deadline.
File even if the assessor never sent you a blank form, and file even if you believe you owe nothing. Skipping the filing hands the assessor the authority to estimate your property’s value independently, and those estimates rarely favor the taxpayer. Sloppy reporting causes the same problem on a smaller scale: missing acquisition dates or vague descriptions get filled in with assumptions that inflate your assessment. Underreporting can also trigger penalties.
Small Business Exemption
Michigan exempts small businesses from the personal property tax, but the paperwork depends on how much property you own within a single local tax collecting unit.
Under $80,000 in True Cash Value
If your combined commercial and industrial personal property in a local tax collecting unit has a true cash value below $80,000, you qualify for a full exemption. File Form 5076 with the local unit by February 20 the first year you claim it. The exemption then stays in effect automatically until your property no longer qualifies. No annual refiling.
$80,000 to $180,000 in True Cash Value
Between $80,000 and $180,000, you still qualify for the exemption, but you have to file both Form 5076 and Form 632 every year by February 20. There’s no automatic renewal at this tier.
A few rules catch people out. The thresholds count property owned by you and related entities in the same local tax collecting unit together; you can’t split holdings across affiliated companies to duck under the line. The exemption also doesn’t apply if the property is leased to, or used by, someone who previously owned it, or by anyone who controls or is controlled by that former owner. That rule blocks sale-and-leaseback arrangements designed only to qualify.
Manufacturing Equipment Exemption
The Eligible Manufacturing Personal Property (EMPP) exemption removes the traditional property tax from qualifying manufacturing equipment. Two categories are eligible:
- Qualified previously existing property: equipment first placed in service anywhere more than 10 years before the current calendar year, predominantly used in industrial processing or direct integrated support.
- Qualified new property: equipment initially placed in service after December 31, 2012, predominantly used in industrial processing or direct integrated support.
To claim the exemption, file a fully completed Form 5278 with the local assessor by February 20 each year. Annual filing is required no matter how long you’ve held the equipment.
The Essential Services Assessment
Manufacturers claiming the EMPP exemption don’t walk away tax-free. Michigan imposes an Essential Services Assessment (ESA) on exempt manufacturing property to help fund local services like police and fire protection. The ESA multiplies each asset’s acquisition cost by a millage rate that depends on how long the equipment has been in service: newer equipment pays a higher rate, older equipment a lower one. The ESA generally costs less than the traditional property tax it replaced, but it isn’t zero, and ignoring it creates compliance problems.
Nonprofit Property
Personal property used exclusively for charitable, educational, or religious purposes by a qualifying nonprofit is exempt under the General Property Tax Act. “Exclusively” is doing real work in that sentence — mixed charitable and commercial use can cost the exemption on that property.
Who Files on Leased Equipment
Leased equipment causes ongoing confusion. As a general rule, the lessor (who holds legal title) reports the property to local taxing authorities. But most commercial leases contain a pass-through clause requiring the lessee to reimburse the lessor for the tax, so the business actually using the equipment often bears the cost even though someone else files the form. Read the lease. And if you’re the lessee, confirm the lessor is actually filing, because if reporting fails the assessor may pursue whoever has possession of the equipment.
When Payment Is Due
Michigan splits property tax collection into two seasons. Summer bills go out in early July and are due by September 14. Winter bills become a lien on December 1 and are due by February 14. Some cities set different dates in their charters, so verify with your local treasurer.
Miss the September 14 summer deadline and you owe a 1% administrative fee plus 1% interest for each month the balance remains outstanding. Interest compounds monthly, so by February the total penalty runs 7% above the base tax. If the bill is still unpaid on March 1, the delinquent amount is turned over to the county treasurer, and additional interest applies from that point. County collection can eventually lead to seizure and sale of property, though that outcome is rare for an operating business.
Appealing an Assessment
If the assessor overvalued your property, or if you missed an exemption filing, Michigan gives you a structured path to fix it.
Local Board of Review
Start with the local Board of Review. It holds its organizational meeting on the first Tuesday in March and begins hearing appeals the second Monday of March. For 2026, those dates are March 3 and March 9. Bring evidence: recent sale prices for comparable equipment, an independent appraisal, documentation of physical deterioration, or proof of functional obsolescence.
The Board of Review is also the safety net for missed exemption deadlines. If you didn’t file for the small business exemption, the EMPP exemption, or the qualified heavy equipment rental exemption by February 20, you can submit a late application directly to the March Board of Review.
Michigan Tax Tribunal
If the Board of Review denies your appeal or the outcome doesn’t satisfy you, file a petition with the Michigan Tax Tribunal. The deadline is generally May 31 of the tax year for the Small Claims Division (property valued under $100,000) or July 31 for the Entire Tribunal. The Tribunal reviews the evidence fresh and isn’t bound by the Board of Review’s findings. Beyond the Tribunal, a further appeal to the Michigan Court of Appeals is possible, but it reviews only whether the law was applied correctly and typically requires legal representation.