Gratiot County Profile

Michigan Tax-Free Renaissance Zones

"Zero taxes, no paperwork, no huge bureaucracies, just zero taxes if you invest in our communities."
-Former Governor John Engler

In 1996, Michigan established the nation's first TAX FREE areas called Renaissance Zones. A Renaissance Zone (RZ) is a region created to generate economic growth in selected areas of the state by abating state and local taxes for any business or resident currently in or moving into one of these regions. Michigan became the first state in the country with these tax free zones. Tax free status began in January of 1997 and continues for the next fifteen years. During the last three years of the program, taxes will be gradually phased in, starting at 25% in year thirteen and adding another 25% each of the last two years (taxes will reach 100% after the fifteen years). Gratiot County and Montcalm County, which borders Gratiot County on the west, together were selected as one of eleven original communities in Michigan to contain a Renaissance Zone. Nine separate sub-zones, covering more than 1,870 acres in the two counties, have been chosen as TAX FREE areas.

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.
• 6- mill State Education Tax (SET) the state property tax levy for schools is 100% abated. This amount is included in your local property tax bill.

Local units of government handle the property tax abatement differently. To find out how to claim the abatement for property taxes, please contact us.
 

State and Local Taxes

• Single Business Tax - A tax credit is allowed against the Michigan Single Business Tax (SBT) for business activity attributable to the Renaissance Zone.
• Local Income Tax - City corporate income taxes, if applicable in the zone, are 100% abated.
• 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.

Residential Tax Benefits

Most state and local taxes for individuals 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 homes are nearly 100% abated.
• Personal Property - Personal property owned by individuals is 100% exempt under Michigan's property tax system. 
• 6-mill State Education Tax (SET) - The state property tax levy for schools is 100% abated. This amount is included in your local property tax bill.

Local units of government handle the property tax abatement differently. To find out how to claim the abatement for property taxes, please contact us.

State and Local Taxes

• State Personal Income Tax -The state's personal income tax rate is a blended rate of 3.95% in 2004 and will decline to 3.9% by 2005. Individuals living in a Renaissance Zone are exempt from paying the state personal income tax.
• Local Income Tax - City personal income taxes, if applicable in the zone, are 100% abated.
• Utility Users Tax – This only applies to residents or businesses in the City of Detroit. The city levies a 5% tax on utility bills. Individuals living within the Renaissance Zone are exempt from this tax.

Source: Michigan Economic Development Corporation

By law, Renaissance Zones waive three state taxes for businesses and residents: the single business tax, the personal income tax, and the 6-mill state education tax. Local taxes waived include: real and personal property taxes on operating mills, local income tax, and utility users tax. Businesses and residents are still required to pay the state's six percent sales tax, local sewer and water fees, fuel taxes, and all Federal taxes. Other obligations may include property taxes which result from local bonded indebtedness or special assessments. These are not waived because they are voted indebtedness, fees-for-service, rather than taxes, or are federally required.

To be eligible for the tax free status, a business or resident must be located in one of the sub-zones, must not be delinquent on any state or local taxes abated by RZ law, and must file all necessary, standard tax forms a non-RZ local business or resident must file. There is no application! Governor Engler described Renaissance Zones as "zero taxes, no paperwork, no huge bureaucracies, just zero taxes if you invest in our communities."

The Gratiot-Montcalm Renaissance Zone

Gratiot and Montcalm Counties demonstrated an unprecedented level of inter-governmental cooperation in applying for and undertaking such a large project. All of the directly impacted local units of government, fifteen in all, unanimously supported this concept. Support was also given by twenty-three other organizations including other local units of government, local school districts, agricultural interests, and the private sector. This demonstrates that there exists a strong grass roots level support from both the public and private sectors in making the Renaissance Zone in Gratiot and Montcalm Counties successful. This inter-county cooperation includes those in the RZ and those who are not.

Please visit our Industrial Parks page for information on other Gratiot County industrial parks