The Phase-In Process
2020 will be the fifth year of the phase-in process for manufacturers’ annual PPT tax cut which has saved manufacturers more than $1.5 billion since 2016. The tax cut is phased in based on the age of the equipment, though approximately 80 percent of the property statewide was exempt on 1/1/16, the remaining 20 percent will be phased out through 2022.
- Each year after 2016, equipment that is ten years old or older will drop off until all Eligible Manufacturing Personal Property becomes exempt as of 2023**
- Equipment considered “Qualified Previously Existing Personal Property” and is 10 years old or older (purchased in 2009 or earlier) is exempt as of 1/1/20
- Equipment considered “Qualified New Personal Property” and purchased after 12/31/12 remains exempt
The chart below indicates when your property will become exempt, based on when property was first placed in service.
Source: Honigman Miller Schwartz and Cohn LLP