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not be delinquent
in state income tax, single business tax, or substantially
delinquent as defined by the local unit of government in property
taxes or city income taxes.
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file an
annual state and, if appropriate, local income tax return.
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file a
form prescribed by the Renaissance Zone community for local income
tax purposes.
Businesses located within
Renaissance Zones
I have a business in
a Renaissance Zone. Is it eligible for Renaissance Zone tax benefits?
Yes. Both corporations and
the unincorporated businesses are exempt from most property taxes on
property in the Renaissance Zone and are exempt from a portion of
Single Business Tax (SBT) and city income tax attributable to business
activity in the Renaissance Zone. The firm cannot be delinquent in any
state taxes or substantially delinquent in property taxes or local
income taxes abated under the Renaissance Zone law. To be eligible for
the tax benefit, qualified taxpayers must file an annual SBT return,
and, if applicable, a city income tax return. The SBT credit is
effective for tax years beginning after December 31, 1996. The city
income tax deduction is effective beginning with the tax year ending
in 1997. For tax years beginning in 1996 and ending in 1997, the city
income tax deduction will be prorated based on the firm's business
activity occurring in the zone in 1997.
I have a business
located in a Renaissance Zone. I rent space from another business. For
what Renaissance Zone tab benefits is my business eligible?
Your business is exempt
from the portion of the Single Business Tax (SBT) and city income tax
attributable to business activity in the Renaissance Zone. You must
file an annual SBT return and, is applicable, a city income tax
return. Personal Property is exempt from most property taxes if it is
located in the zone on December 31 and at least 182 other days of the
preceding tax year, or the owner files an affidavit stating it will be
in the Renaissance Zone 183 days of the tax year the exemption is
claimed. To receive the Renaissance Zone tax benefits, the business
cannot be delinquent in any state taxes or substantially delinquent in
any local taxes abated under the Renaissance Zone law.
I own property in
the Renaissance Zone and rent this space out to a business. For what
Renaissance Zone tax benefits am I eligible?
The real and personal
property owned by you and located in the Renaissance Zone is exempt
from most property taxes. For personal property to qualify it must be
located in the zone on December 31 and at least 182 other days of the
preceding tax year or the owner files an affidavit stating it will be
in the Renaissance Zone 183 days of the tax year the exemption is
claimed. You are also exempt from the portion of the Single Business
Tax (SBT) and city income tax attributable to your business activity
in the Renaissance Zone. You must file an annual SBT return and, if
applicable, a city income tax return. To receive the Renaissance Zone
tax benefits, you cannot be delinquent in any state taxes or
substantially delinquent, as defined by the local unit of government,
in local property taxes and city income taxes abated under the
Renaissance Zone laws.
Is personal property
eligible for the property tax reduction?
Personal property is
eligible for property tax reduction if two conditions are met: 1) the
personal property must be physically located in the zone on December
31 in the calendar year immediately preceding the year in which the
abatements apply, and 2) it must have been in the zone at least 182
other days in the calendar year immediately preceding the year in
which the abatements apply. As an example, for personal property to be
reduced or eliminated in calendar year 2004, the personal property
must have been in the zone on December 31, 2003 and 182 other days in
2003.
What if my firm has
employees who work outside the Renaissance Zone, or my firm has more
than one location of business activity in Michigan?
Only the portion of a
business tax liability that is attributable to business activity
conducted within a Renaissance Zone is eligible for the tax credits
under the Renaissance Zone law. For the city income tax, the
Renaissance Zone deduction is equal to the tax liability attributable
to business activity conducted within the zone. The city income tax
deduction is based on the average of two factors: percentage of city
property that is located in the zone and of the payroll paid for work
done or services performed in the city, and the percentage
attributable to work done or services performed in the Renaissance
Zone.
For SBT, the Renaissance
Zone credit is equal to the tax liability attributable to business
activity conducted within the zone. The SBT credit is based on the
average of two factors: percentage of Michigan property located in the
zone and percentage of Michigan payroll paid for work done or business
activity related to the operation of a casino.
For additional
clarification on these issues, the business should contact its
accountant and/or the Michigan Department of Treasury for final
determination regarding the apportioning of taxes.
What if the
Renaissance Zone boundary bisects a parcel of property?
The property taxes on the
parcel will have to be apportioned between property that is inside and
outside of the zone. The responsibility of assessing the property in
this scenario rests with the local unit of government.
Non-Michigan businesses
locating to
Michigan Renaissance Zones
What restrictions
apply to non-Michigan firms moving into a Renaissance Zone?
Businesses without a
presence in Michigan do not have job transfer restrictions.
Notification requirements do not apply for non-Michigan firms moving
into Michigan Renaissance Zones.
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