July 13, 2020

Volume X, Number 195

July 13, 2020

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Bill Helps Alleviate Tax Burdens of over $200 Million

Lt. Gov. Brian Calley signed new legislation, Public Acts 113-114 of 2018, that will help farmers protect farm equipment and make good use of the agriculture's sales and use of tax exemption.

In response to changing policy in the Department of Treasury, the bill will allow for all Treasury Department interpretation to follow the new definitions for any applicable tax years. The bill exempts from taxation direct and indirect farm related equipment purchases which will help reduce tax burdens estimated at about $293 million.

Michigan Farm Bureau (MFB) was a strong supporter of the bill as well as over 600 farmers who sent emails to various legislative bodies voicing their concerns. With reduced profit margins in the farm economy, House Representative Dan Lauwers (R-Brockway), who worked on ensuring the bill passage, believes that the bill will be a welcome relief for farmers with the clarity it provides.

The bill also allows farmers to use the agriculture sale and use tax exemption for tangible personal property such as heating and cooling, water systems and milking systems. Additionally, the it provides clarity regarding tax expectations on certain green housing operations according to MFB Legislative Council Rebecca Park. Equipment which can be disassembled and reassembled without affecting functionality, as well as all direct equipment used, would not be subject to tax, Park has reported.

© 2020 Varnum LLPNational Law Review, Volume VIII, Number 161


About this Author

Aaron M. Phelps, Varnum, litigation attorney

For over 15 years, Aaron's practice has been focused on complex commercial and environmental litigation - in Michigan and around the country. Aaron has represented clients in contract and corporate governance disputes, telecommunications and energy matters, health care litigation, and tort actions.

Over the last five years, Aaron has represented over 200 companies in lawsuits against Blue Cross Blue Shield of Michigan for ERISA violations. The first trial resulted in a $6 million judgment, and subsequent judgments ranged from $315,000 to over $8 million. Currently...