Essential Definitions to Know
Direct Integrated Support is defined as:
- Research and development related to goods produced in industrial processing and conducted in furtherance of that industrial processing.
- Testing and quality control functions related to goods produced in industrial processing and conducted in furtherance of that industrial processing.
- Engineering related to goods produced in industrial processing and conducted in furtherance of that industrial processing.
- Receiving or storing equipment, materials, supplies, parts, or components for industrial processing, or scrap materials or waste resulting from industrial processing, at the industrial processing site or at another site owned or leased by the owner or lessee of the industrial processing site.
- Storing of finished goods inventory if the inventory was produced by a business engaged primarily in industrial processing and if the inventory is stored either at the site where it was produced or at another site owned or leased by the business that produced the inventory.
- Sorting, distributing, or sequencing functions that optimize transportation and just-in-time inventory management and material handling for inputs to industrial processing.
Eligible Manufacturing Personal Property (EMPP) means all personal property located on occupied real property if that personal property is predominantly used in industrial processing or direct integrated support. For personal property that is construction in progress and part of a new facility not in operation, EMPP means all personal property that is part of that new facility if that personal property will be predominantly used in industrial processing when the facility becomes operational. Personal property that is not owned, leased or used by the person who owns or leases occupied real property where the personal property is located is not EMPP unless the personal property is located on the occupied real property to carry on a current on-site business activity. Personal property that is placed on occupied real property solely to qualify the personal property for an exemption under 9m or 9n is not EMPP. For additional information, please refer to the Assessor’s Guide to ESA and EMPP.
Eligible Personal Property (for purposes of the State Essential Services Assessment) means personal property exempt under MCL 211.9m or 211.9n and personal property that is EMPP (defined in MCL 211.9m) that is exempt under a P.A. 328 (MCL 211.9f) which was approved in 2014, unless the application for the exemption was filed with the eligible local assessing district or Next Michigan development corporation before August 5, 2014 and the resolution approving the exemption states that the project is expected to have total new
personal property of over $25,000,000.00 within 5 years of the adoption of the resolution by the eligible local assessing district or Next Michigan development corporation. Personal Property subject to an extended industrial facilities exemption certificate under section MCL 207.561a (IFT). Personal Property subject to an extended exemption under MCL 211.9f(8) (328 Exemption).
State Essential Services Assessment Act (SESA)is an act to levy a tax on certain personal property; to provide for the administration, collection, and distribution of the tax; to impose certain duties on persons and certain state departments; to impose penalties; and to repeal acts and parts
of acts,” (MCL 211.1051 - 211.1061).
Industrial Processing is defined in MCL 205.54t and MCL 205.94o: “Industrial processing” means the activity of converting or conditioning tangible personal property by changing the form, composition, quality, combination, or character of the property for ultimate sale at retail or for use in the manufacturing of a product to be ultimately sold at retail. Industrial processing begins when tangible personal property begins movement from raw materials storage to begin industrial processing and ends when finished goods first come to rest in finished goods inventory storage. Industrial processing does not include the generation, transmission, or distribution of electricity for sale.
Utility personal property (as defined in MCL.211.34c) is not used in industrial processing or direct integrated support.
Occupied Real Property, Industrial Processing and Direct Integrated Support are defined in MCL 211.9m and the Assessor’s Guide to ESA and EMPP.
Qualified New Personal Property is defined as personal property that was initially placed in service in this state or outside of the state after December 31, 2012 or that was construction in progress on or after December 31, 2012 that had not been placed in service in this state or outside of this state before 2013 and is eligible manufacturing personal property.
Qualified Previously Existing Personal Property means personal property that was first placed in service within this state or outside of this state more than 10 years before the current calendar year and is eligible manufacturing personal property.