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Tax & Assurance Guidance

Manufacturing Personal Property Tax Exemption & the Essential Services Assessment

Posted on May 19, 2016 by

Margaret Amsden

Margaret Amsden

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Taxpayers that have properly claimed the eligible manufacturing personal property (EMPP) tax exemption by timely filing Form 5278 by February 22, 2016 can now view and certify their electronic Essential Services Assessment (ESA) Statement. Eligible taxpayers must submit a certified statement through Michigan Treasury Online (MTO), paper statements are not accepted.

The Department of Treasury created each taxpayer’s ESA statement from information contained in Form 5278 that was transmitted by the local unit assessor. The ESA is a state specific tax, payable to the State and not the local assessor, on eligible personal property owned by, leased to or in the possession of an eligible claimant as of December 31.

To access your ESA Statement taxpayer’s will need to be registered with the MTO system.  You will need your Federal Employer Identification Number (as reported on Form 5278) and a copy of the 2016 Form 5278. Through the MTO system you will be able to view, change (if necessary), and certify the ESA Statement. You will also be able to view correspondence from the Treasury and pay the ESA tax (payments cannot be mailed to the Department of Treasury).

Taxpayers must certify the Statement and pay the ESA tax in full by August 15, 2016. Taxpayers failing to certify and pay by the tax by August 15th will incur penalties at a rate of 1% per week, up to a maximum of 5% of the total amount due and unpaid. For an eligible claimant’s first assessment year, the penalty shall be waived if the Statement and full payment are submitted by September 15.

Taxpayers can pay the ESA tax by using MTO or Electronic Funds Transfer (EFT) credit with penalty no later than October 15. Taxpayers who fail to submit a certified Statement and pay ESA in full, including any late payment penalties, by October 15 via MTO or e-File shall be subject to rescission of their personal property tax exemption.

As an authorized preparer, we can electronically file the ESA Statement through the Modernized e-File System (MeF) beginning Mid-June 2016. Please contact us if you will need our assistance.

ESA 2016 Key Dates

  • Feb 22 – Form 5278 was due to Local Assessor.
  • May 1 – Electronic ESA Statement available on MTO.
  • May 31 – 2016 Filing deadline extension for Form 5278 due to Local Assessor.
  • Aug 15 – Completed Statement and Full Payment due to Department of Treasury.
  • Oct 15 – Late filed statement and penalty due.
  • Dec 5 – State Tax Commission issues order to rescind personal property tax exemption.
  • Dec 31 – Deadline to file an appeal to the STC.

Margaret Amsden

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Margaret leads the firm’s private client services group as the point person for individual, estate and succession planning tax strategies.

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