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ESA Filing Date and Late Payment Penalty Changes

by Michigan Department of Treasury | Jan 14, 2019   ()

Editor’s Note - update on 1/14/19 with link to new Form 5278 for 2019 

https://www.michigan.gov/documents/taxes/5278_500796_7.pdf

On December 27, 2018, Governor Snyder signed Public Acts 541 and 505 of 2018 into law. These acts make changes related to filing and payment dates for the Essential Services Assessment (ESA) in 2019 and later assessment years. Although the August 15th deadline to certify and pay ESA and the September 15th deadline to amend a previously certified ESA statement remain,P.A. 541 and 505 change the date by which ESA liability and late payment penalty must be paid in full to April 15th of the year following the assessment year. If full payment of ESA liability and late payment penalty is not received by April 15th of the following year, the Department of Treasury must rescind the Eligible Manufacturing Personal Property (EMPP) exemption no later than the first Monday in June of that year. The deadline for taxpayers to appeal an assessment, penalty, or rescission to the Michigan Tax Tribunal is also extended to December 31st of the year following the assessment year.

In addition to the extended deadlines, the acts increase the late payment penalty of any ESA statement that is not paid in full by August 15th to 3% of unpaid liability per month or part of a month, to a maximum of 27%. Penalty is not to be prorated based on the day of the month that the late payment is received.

There are no changes to the February 20th deadline to claim the EMPP exemption by filing Form 5278 with the assessor of the local governmental unit in which the personal property is located nor the ability to file Form 5278 late, directly with the March Board of Review of the same local unit. Taxpayers are reminded that to receive the EMPP exemption, Form 5278 must be filed annually.

An updated version of Form 5278 for 2019 with the new ESA deadlines will be available on the ESA website within the next week. However, the previous version of the Form 5278 for 2019 without the date changes will be accepted.

Source: Michigan Department of Treasury

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