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What is “qualified personal property” of a “qualified business”?
“Qualified personal property” is property owned by a “qualified business” (generally a leasing
company), which is made available to another (typically a lessee), under a written agreement
which provides that the lessee, rather than the “qualified business” will report the “qualified
property” on the lessee’s personal property statement. To be a “qualified business” the business
must be a “for-profit” enterprise that obtains services from 30 or fewer employees. For purposes
of determining whether a business is a “qualified business,” employees of entities under common
control and employees of other members of an affiliated group are deemed to be employees of
the business. For property to be deemed “qualified personal property,” the agreement must
extend for a non-cancelable term of 12 months, or more, the user must be a “for-profit” business
and the user must obtain legal title to the property by making all of the periodic payments or by
making all the payments, plus a final payment less than the true cash value of the property. To
avail itself of this exception, the leasing company must complete and file Treasury Form 2699
with the assessor by February 1 of the assessment year. Complete instructions and qualification
requirements are provided with that form and in State Tax Commission Bulletin 16 of 1994 and
Bulletin 5 of 1999 which can be found at:
http://www.michigan.gov/treasury/0,1607,7-121-1751_2228-164455--,00.html .
Reference: Michigan Compiled Laws 211.8a, Michigan Compiled Laws 211.13 and Michigan Compiled Laws
211.19
If I am a lessee of “qualified personal property” of a “qualified business” how is that
property reported on my personal property statement?
Report “qualified personal property” of a “qualified business” in Section I on page 3 of the
personal property statement. You are expected to provide all information requested. The
information needed should be provided to you by the leasing company. You should not report
this personal property elsewhere on the personal property statement.
Reference: Michigan Compiled Laws 211.8a, Michigan Compiled Laws 211.13 and Michigan Compiled Laws
211.19, along with the Instructions to Section I, Page 3 of the personal property statement, Form L-4175 (Treasury
Form 632) and State Tax Commission Bulletin 16 of 1994 and Bulletin 5 of 1999. These Bulletins can be found at
http://www.michigan.gov/treasury/0,1607,7-121-1751_2228-164455--,00.html
Why is personal property leased to a “for-profit” taxpayer by a bank, a savings and loan (a
savings bank) or a credit union assessed to the lessee?
By separate statutory provisions, banks and trust companies, savings and loan associations
(savings banks) and credit unions are exempt from payment of personal property tax. However,
this exemption does not extend to non-banking subsidiaries of banks that are separate legal
entities from the bank, or to the real property interests of such entities. Buildings, or structures
(such as kiosks), on leased land and leasehold improvements, are not exempt. Further, personal
property owned by such entities which is made available to a “for-profit” user, such as a lessee,
or which is made available to its own non-banking subsidiary, is not exempt. State Tax
Commission Bulletin 2 of 1992 provides that such an exempt entity must file an information
return on a form approved by the Commission in each assessment jurisdiction where it has
personal property being used by a “for-profit user”, disclosing the name and address of the “for-
profit” user, the acquisition cost of the personal property in question and the year of acquisition
of the property. Bulletin 2 of 1992 can be found at: http://www.michigan.gov/treasury/0,1607,7-
121-1751_2228-164455--,00.html .