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

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.