| Program | Alternative Energy Personal Property Tax Exemption (Commercial and Industrial) |
|---|---|
| Category | Financial Incentive |
| Implementing sector | State |
| Last Update | |
| State | Michigan |
| Website | https://www.michigan.gov/-/media/Project/Websites/treasury/Letters/Bulletins/Bu… |
| Technologies | Solar Water Heat, Solar Space Heat, Solar Thermal Process Heat, Solar Photovoltaics |
Michigan exempts qualifying alternative energy personal property owned by commercial and industrial taxpayers from the collection of personal property taxes, under MCL 211.9i. Public Act 118 of 2019, effective November 15, 2019, rewrote the exemption, and the Michigan State Tax Commission sets out the current rules in Bulletin 6 of 2020.
Homeowners are not eligible for this exemption. Residential systems are handled by a separate provision — the alternative energy system property tax exclusion for residential real property.
What qualifies. The property must be an "alternative energy system" as that term is defined in section 2 of the Michigan Next Energy Authority Act, 2002 PA 593 (MCL 207.822), which covers the small-scale generation or release of energy by fuel cell, photovoltaic, solar-thermal, wind, combined heat and power, microturbine, miniturbine, Stirling cycle, battery cell, clean fuel, electricity storage, biomass and thermoelectric energy systems. The exemption applies regardless of who owns the system, provided the remaining requirements are met. It does not cover real property such as land and buildings.
Requirements. The system must have a generating capacity of no more than 150 kilowatts, and must be used solely to offset all or part of the commercial or industrial energy use of the person on whose real property it is located. For systems installed after November 15, 2019 there is a further test: the system's true cash value, combined with the true cash value of all personal property the claimant or a related entity holds exempt as eligible personal property under MCL 211.9o, must total less than $80,000.
A note on earlier descriptions of this exemption. From 2002 until 2012 the exemption reached only property certified by the NextEnergy Authority and located in the NextEnergy Zone at Wayne State University in Detroit. That geographic restriction is not part of the current exemption: the Next Energy Authority Act now supplies only the definition of "alternative energy system." Descriptions that require NextEnergy certification, or a location inside the zone, are out of date.
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