The consumer tip, Personal Property Tax Exemption for Solar Panels, released by the Michigan Agency for Energy (MAE) and Michigan Public Service Commission (MPSC) has caused much confusion as some local tax assessors have declared it “contrary to Michigan Law”. We have communicated with MAE, MPSC and the Michigan Tax Commission and gleaned the following information:
The Tax Exemption Consumer Tip from MAE/MPSC was reviewed by the Michigan Tax Commission prior to the release.
Upon release it was expected that local tax assessors would simply see that solar is classified as personal property (based on a prior Michigan Tax Tribunal Case) as clarification of the issue and act accordingly to not tax solar if a tax exemption form is filed. However, not all assessors have responded in this way.
Local tax assessors have much latitude in the valuation of taxable property but not in the classification of property (taxable or not taxable). At least one local assessor has not accepted the personal property classification and is refusing to accept exemption forms.
The problem is that the Michigan Tax Commission has not officially ruled on the classification of solar as personal property or real property, so it is still unclear. A case in front of the Michigan Tax Tribunal (tax court) is expected to be ruled upon in the very near future and has released a statement that they intend to rule that, in this case, solar is not personal property, it is real property and therefore taxable.
The Michigan Tax Commission can agree with this case ruling or not, and move to set the final designation for solar as personal or real property. The next meeting of the Michigan Tax Commission is Tuesday, February 13th and they do accept public comment at the beginning of the meeting.
MPSC/MAE is expected to release a clarification on their tax tip very soon, certainly by the end of the week.
Stay tuned, be active,
Dave Konkle, President
Great Lakes Renewable Energy Association