Through a variety of programs and resources, Michigan offers personalized assistance for businesses starting, relocating or expanding operations in the state. In addition, Michigan ranks among the top 10 states for major new and expanded facilities due to a fair and efficient 6% corporate income tax and $500 million in annual business savings through the elimination of industrial personal property tax.
Michigan has established several state and local economic development resources that provide support for companies investing and expanding their operations and workforces in Michigan communities. Some of these include:
The Michigan Business Development Program is available from the Michigan Strategic Fund (MSF), in cooperation with MEDC. The program is designed to provide grants, loans or other economic assistance to businesses for highly competitive projects in Michigan that create jobs and/or provide investment.
The Good Jobs for Michigan legislation created new tools that encourage transformational, large-scale projects in Michigan. Through this program, the MSF may authorize state withholding tax capture revenues of up to 50 or 100 percent for up to five or 10 years, depending on the average annual wage and the number of certified new jobs created by the authorized business.
The State Essential Services Assessment is required for manufacturers that do not pay personal property tax on eligible manufacturing personal property. The MSF, in certain circumstances, may choose to exempt or reduce the Assessment for projects that create jobs and/or private investment in Michigan through the State Essential Services Assessment (SESA) Exemption or the Alternative State Essential Services Assessment Incentive.
MCRP is a program available from the MSF, in cooperation with MEDC, designed to promote community revitalization that will accelerate private investment in areas of historical disinvestment, contribute to Michigan’s reinvention as a vital, job-generating state, foster redevelopment of functionally obsolete or historic properties, reduce blight; and protect the natural resources of the state.
MEDC, on behalf of the Michigan Strategic Fund (MSF), administers the Community Development Block Grant (CDBG) program. CDBG is a federal grant program utilizing funds received from the U.S. Department of Housing and Urban Development (HUD). Funds are used to provide grants to eligible counties, cities, villages, and townships, usually with populations under 50,000, for economic development, community development and housing projects.
Michigan is continually finding ways to reduce and/or maintain low taxes so businesses can operate efficiently, and thereby expand and create jobs.
Michigan's individual income tax rate is one of the lowest in the nation, a flat 4.25% tax rate that is scheduled to decline in the next few years. For more information, visit the Michigan Taxes Website.
Michigan's 2017 average non-homestead property tax rate was 52.65 mills, or $52.65 per $1,000 of assessed property, with real and personal property subject to taxation at 50% of current market value. In an ongoing effort to make the state a more attractive place for businesses to invest and grow, Michigan began phasing out its Personal Property Taxes for most businesses beginning in 2014. Businesses claiming the personal property tax exemption will instead be subject to a statewide special assessment, ranging from 0.9 to 2.4 mills, to fund essential services levied by local governments. Additional property tax abatements available to Michigan businesses include:
The state sales tax is 6% on sales of tangible goods. No local sales taxes are allowed. There is no state sales tax charged on manufacturing machinery and equipment, electricity and natural gas used in production, or pollution control equipment. For more information visit the Michigan Taxes Website.
To protect workers who lose their jobs through no fault of their own, Michigan businesses pay unemployment insurance on the first $9,500 of wages paid to each worker in a calendar year. Established employers may pay as little as 0.06%.
The unemployment insurance rate is based on the experience rating of the business, which varies depending on how many employees draw unemployment insurance benefits. The new employer rate is 2.7% and once a business is established in Michigan, they experience rates varying between 0.06% and 10.3%. For more information, visit the Michigan Unemployment Insurance Agency (UIA) website.
Michigan's "open competition" competitive workers' compensation (WC) insurance system allows market forces to set the WC insurance rates, thus enabling companies to shop among nearly 250 insurance carriers for the best options. With such a wide-range of cost-savings opportunities, Michigan businesses can play a significant role in containing or reducing their WC costs.
The following resources will help you understand and navigate through the WC insurance system: