In a 60-43 vote Thursday largely along partisan lines, the Republican-controlled House concurred in Senate amendments to S.B. 943. Under the bill, entertainment venues, exercise facilities, food service establishments and recreation facilities or places of public amusement could apply for a deferral of their 2020 summer property taxes — those levied in 2020 that first became a lien before Dec. 1 — until Feb. 15. The bill will now head to Democratic Gov. Gretchen Whitmer.
The bill is the second attempt for lawmakers to provide property tax relief for businesses that have suffered financially during the spread of COVID-19, the respiratory illness caused by the novel coronavirus. Whitmer vetoed a more sweeping property tax deferral bill in July, saying that its requirement for counties to finance advance payments to their municipalities to offset the deferred taxes violated the state constitution.
In response, lawmakers began working on S.B. 943 to craft a property tax relief bill that Whitmer may support, narrowing the scope of the relief and the funding mechanism for localities. The bill would require the state Department of Treasury to reimburse local taxing units for the penalties and interest charges waived, but only up to an amount appropriated for the program that is expected to be included in a supplemental budget bill before the session ends Dec. 31.
Whitmer spokeswoman Chelsea Parisio told Law360 on Friday that the governor's office is reviewing the legislation.
The bill is designed to aid industries that were ordered to close or cease certain indoor operations during the state's "three-week pause" restrictions that began Nov. 18 and have since been extended, Dan Papineau, director of tax policy and regulatory affairs for the Michigan Chamber of Commerce, told Law360.
According to the bill, businesses eligible to apply for the deferral must have experienced an economic hardship as a result of COVID-19 or "the government's response to the pandemic."
While the chamber backs the bill, Papineau lamented its limited reach and value to taxpayers, who he said would only be provided with a short amount of time to catch up on their back property taxes.
"We're supportive, but it is such a minuscule amount of relief," he said.
Papineau said on Friday that it appears that about $5 million will be appropriated for the program, although he added that the supplemental budget bill is still being negotiated. The chamber had sought at least $15 million for the deferral program, but Papineau said that "we will take what we can get."
However, even if the bill is enacted, the chamber believes the capped property tax relief would be insufficient for struggling businesses and will be seeking a broader tax credit package when the new session begins next month, Papineau said.
"Everybody that's been affected by the pandemic that's been forced to close … should have access to a program that's not dependent on applications or winner-of-a-draw-type scenarios," he said.
A representative for the bill's primary sponsor, Peter MacGregor, R-Rockford, did not immediately respond to a request for comment on Friday.
The office of House Democratic Leader Christine Greig, D-Farmington Hills, who voted against the bill, also did not immediately respond to a request for comment on Friday
--Additional reporting by James Nani. Editing by Joyce Laskowski.
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