Manufacturers Have Saved $2.88 Billion Since 2016
Watch for Upcoming PPT Deadlines and Claim Your Annual Exemption
Update: To help improve the annual filing process, MMA successfully pushed legislation to allow applications postmarked on or before the February 20 (February 22 for 2021) filing deadline to be accepted by the local assessor as delivered on-time. The MMA-led legislation also created a late filing option with the local board of review, prior to its final adjournment, to help companies avoid losing the total value of an exemption due to a late filing.
We encourage your to file to claim your share of an annual tax cut which has saved manufacturers more than $1.5 billion since 2016. This annual tax cut was the result of of MMA’s hard-fought elimination of the PPT on manufacturing equipment, a primary barrier to competitiveness for manufacturers, in the Legislature and winning a statewide ballot proposal thanks to overwhelming public support.
Fall Deadline: This tax cut requires manufacturers to take proactive steps and meet very specific deadlines (see the sidebar on the left or see Deadlines for details) to claim the exemption. The process includes paying a small assessment, the State Essential Services Assessment (SESA, sometimes referred to as ESA), to the State to help reimburse local units for the elimination of the PPT and which must be paid by August 15.
Beginning in 2020, MMA successfully pushed legislation to eliminate the late payment “death penalty” for the SESA. Instead of an immediate loss of the full exemption, payments made after the annual August 15 deadline are subject to a 3% per month penalty up to a maximum of 27%. Loss of a company’s full exemption only occurs if payment is not made as of April 15 of the following year.
This tax cut does not occur automatically,
you must annually file Form 5278 by Monday, February 22, 2021 (postmark accepted) and submit SESA statement and payment by August 15 (to avoid penalties).
The PPT Savings Tool Kit — Understanding the Exemption Process
This Tool Kit provides you the information and resources to ensure your company takes the appropriate steps to receive this substantial savings. Reference the tabs along the top of the page to access different parts of the Tool Kit. Follow the instructions and it will yield substantial property tax savings for your company.