Business Tax Benefits
Most state and local taxes are abated in the Renaissance Zones. The tax benefits are phased out at 25% increments during the Zone's final three years of existence. Property owners are still responsible for property taxes levied to pay for local bonded indebtedness, school sinking funds, and special assessments. The following state and local taxes are abated for businesses located in a Renaissance Zone:
Property Taxes
- Local Real Property Taxes - General property taxes on land and buildings are nearly 100% abated
- Local Personal Property Taxes – These general property taxes are nearly 100% abated for the business’ personal property that is located in the Renaissance Zone.
- School Property Taxes Abated - Personal property taxes for schools are 100% eliminated in the zone. Recent property tax reforms have exempted industrial personal property - inside and outside of a zone - from the 6-mill State Education Tax (SET) and 18 mills for local schools. Under the same reform, all Michigan commercial personal property is automatically exempt from 12 mills of the local school millage. These personal property exemptions will benefit companies with or without a zone. The savings amount is included in your local property tax bill. Click here for an example millage rate levy in a Renaissance Zone.
Local units of government handle the property tax abatement differently. To find out how to claim the abatement for property taxes, contact the local assessor's office for the Renaissance Zone.
State and Local Taxes
- Michigan Business Tax - A tax credit is allowed against the Michigan Business Tax (MBT) for business activity attributable to the Renaissance Zone. Click here for more information about the MBT, the credit, and the tax forms.
- Local Income Tax - City corporate income taxes, if applicable in the zone, are 100% abated. Click here for a list of Renaissance Zone locations that levy a corporate income tax.
- Utility Users Tax -This only applies to residents or businesses in the City of Detroit. The city levies a 5% tax on utility bills. Businesses located within the Renaissance Zone are exempt from this tax.
For Renaissance Zone eligibility requirements, click here.