TRAVERSE CITY — A Feb. 10 deadline looms for small business owners who potentially are eligible for new exemptions for personal property taxes, and area assessors said they’ve received a mixed response to the offer.
A new state law exempts commercial and industrial personal property from the tax if the total value is worth $80,000 or less. Personal property includes such items as furniture, electronics, machinery, and other property that is not affixed to the building or land.
Residential property owners aren’t assessed personal property taxes.
The legislation requires eligible businesses to file an affidavit with their local assessors by Monday to request the exemption. Failure to file an affidavit will result in a tax bill.
“The law is clear: you have to file an affidavit to get the exemption,” said Amy DeHaan, Garfield Township assessor.
Steve Baesch brought his forms with him to his shop on Wednesday after his accountant informed him of the deadline.
“I’m looking forward to it,” said Baesch, owner of City Bike Shop on Union Street in Traverse City. “I’m tired of paying for the same stuff. One year we had to fill out the forms because we got a new furnace and that cost us quite a bit.”
Garfield Township has about 1,500 personal property tax filers and DeHaan estimates about 1,100 qualify for the exemption. By mid-week the township had received 460 affidavits. DeHaan sent a letter in December to all previous filers that explained the affidavit requirement.
“I think the letter helped because we got several before the end of the year and we are getting a whole bunch of them now, about 20 to 30 a day,” DeHaan said.
Blair Township Assessor Wendy Witkop followed up her letter with phone calls to roughly 180 township businesses she thought would qualify for the exemption.
“It’s new and we wanted to make sure people take advantage of the exemption if they qualify,” Witkop said. “But there is no way we could do that if we were the size of Garfield.”
Assessors have virtually no discretion if a business fails to file an affidavit. If they file the regular property tax form listing the value of their equipment they will receive a tax bill, even if the value is less than $80,000.
Dave Brown, deputy assessor for Traverse City, said about 100 businesses filed personal property tax forms that could have taken an exemption. They have made courtesy calls to notify the businesses that they still have until Feb. 10 to file the affidavit.
“We’ve gotten a pretty good response from that,” Brown said.