TAXES & INCENTIVES
The Detroit Region offers incentives to support your business
Across the country, Michigan ranks as one of the leading states for new and expanded business facilities. This is due in part to our competitive tax environment and robust incentive programs, which make the Detroit Region an advantageous location for companies looking to expand, relocate, or start their business.
With more than $100 million in available incentives each year, the Detroit Region rewards your investment and promotes your growth. Michigan’s incentive programs are among the most flexible in the country. Whether you need quick cash grants or assistance covering your training costs, our state provides a wide variety of resources to support your business.
The Detroit Regional Partnership helps companies and site selectors navigate our region’s programs and negotiate a comprehensive incentive package. Simply contact one of our experts to start exploring opportunities for your project.
The Detroit Region offers a competitive business climate and an affordable tax environment for your company. This includes state and local incentives designed to improve your bottom line and support your business—from tax abatements to grant programs.
The Detroit Region is a place where your business can grow. Our competitive tax climate attracts many of the world’s largest companies and makes us one of the best states for doing business. In fact, Michigan’s overall tax climate ranks among the Top 15 states in the U.S. according to the Tax Foundation’s 2020 Business Report.
Among the Lowest in the Nation
No Local Sales Tax
Primary Incentive Programs
Michigan Business Development Program (MBDP)
The Michigan Business Development Program is the state’s primary incentive program. The MBDP provides economic assistance to companies for highly competitive projects that create jobs and/or invest in Michigan. This incentive offers grants and loans to support new companies as well as businesses planning to relocate or expand here in Michigan.
Typically, this support is deployed as a cash grant with flexible terms and conditions negotiated with your company, including milestone-based payment distribution. The grant can be utilized to address any project cost or need, and most grants are disbursed within the first two to three years of a project, allowing you to quickly access the incentive benefits. The maximum support for a project cannot exceed $10 million unless by special legislative approval.
Jobs Ready Michigan
The Jobs Ready Michigan program is designed to help companies that are expanding or relocating to Michigan meet their talent objectives. These grants are flexible and responsive to your company’s unique needs and can be used for a variety of activities, such as employee recruitment expenses and on-the-job training costs. The program can also be combined with the MBDP incentive, providing for a broad range of financial support.
Industrial Property Tax Abatement (PA 198)
Michigan offers industrial property tax abatements to help manufacturers build new projects, expand existing plants, and renovate aging facilities. These abatements also support the establishment of new, high-technology facilities and operations. This tax incentive can allow for a 50% abatement of local real property taxes on new construction and real property improvements for a period of up to 12 years. This abatement must be approved at both the local and state levels.
Personal Property Tax Relief in Distressed Communities (PA 328)
This program allows distressed communities, county seats, and certain border county communities to abate 100% of personal property taxes on new investments from eligible businesses. Eligible investments include office, research and development, manufacturing, and wholesale trade operations. The local unit of government determines the number of years granted and may allow any number of years for the exemption.
Community Development Brownfield Program
The Brownfield Program uses tax increment financing (TIF) to reimburse brownfield-related costs incurred while redeveloping contaminated, functionally obsolete, blighted, or historic properties. There are two categories of eligible activities under TIF across the state: demolition and lead and asbestos abatement. Two additional categories are eligible in any qualified local government unit (QLGU) or on property owned by a land bank: site preparation and infrastructure improvements. Approval is required by the local governing body and the Michigan Economic Development Corporation.
State Essential Services Assessment (SESA) Exemption
The State Essential Services Assessment (SESA) is required for manufacturers that do not pay personal property tax on eligible property. However, for certain qualified projects, the Michigan Strategic Fund can exempt or reduce the assessment for a period of up to 15 years.
Border County Incentives
Businesses that relocate or expand in a county that borders another state or Canada may qualify for special tax incentives. Through PA 328, eligible companies can receive a 100% personal property tax abatement on new investment. In addition, eligible facilities may receive a 50% reduction in real property taxes for a period of up to 12 years through PA 198. In order to qualify for that incentive, at least 90% of your facility must be used for warehousing, distribution, or logistics purposes and occupy a structure of at least 100,000 square feet. The local unit of government is responsible for approving this incentive.
Renaissance Zones are geographic regions throughout the state that can be considered virtually tax free for any business within the designated border. In these zones, companies may not have to pay Michigan’s 6-mill education tax, local personal property tax, local real property tax, local income tax, and utility users’ tax. There are also specialized Renaissance Zones with industry-specific designations, including renewable energy, forest products processing, and agricultural processing zones.
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VP, Business Development