On the August 5, 2014 primary ballot, you will see “Ballot Proposal 14-1, a referendum on public act 80 of 2014 which allocates use tax revenue for various local purposes.”
The Michigan Legislature voted to phase out or eliminate the personal property tax (PPT) on certain business equipment and to replace the lost PPT revenue to local governments, school districts, libraries and other entities by allocating part of the existing use tax to those entities. The Michigan Constitution requires a vote of the citizens to enact changes to the use tax, so the Michigan Legislature voted to place this proposal on the ballot.
Frequently Asked Questions About Ballot Proposal 14-1
Would this proposal raise taxes?
No. This referendum is not a tax increase.
How does this proposal protect local communities?
This proposal creates a stable funding stream for communities in Michigan to pay for police, fire, ambulance, jails, schools, roads, libraries, and other community services. 100 percent of the funding for community services will be returned directly to Michigan communities for these community services. This dedicated funding for community services is no longer subject to the uncertainty and instability of annual legislative appropriations or politics in Lansing.
Does this proposal amend the constitution?
No. This is not a constitutional amendment. The state constitution requires that this bold effort to reduce taxes by eliminating double taxation on Michigan businesses and stabilizing local funding be approved by a vote of the people—or else the tax cut will be repealed.
How will this proposal affect small business?
The proposal provides an immediate tax cut for small businesses. Small businesses stopped paying the double tax on personal property effective January 2014. If the proposal fails, small businesses would immediately go back to paying the double tax on equipment that businesses in many others states don’t have to pay.
How will this proposal affect manufacturing?
The proposal establishes a statewide Essential Services Assessment that is only paid for by manufacturers that receive a Personal Property Tax (PPT) reduction. Large and small manufacturing businesses will see the PPT phased out over time, beginning in 2016.
How is this funded?
It is paid for by eliminating special corporate tax breaks the Legislature had already voted to end, and by establishing a statewide Essential Services Assessment paid only by manufacturers receiving a personal property tax reduction. This proposal does not raise taxes for anybody.