INSTRUCTIONS TO FORM L-4175 NOTICE: This form is issued under authority of the General Property Tax Act. FILING IS MANDATORY. For willful failure thereof, you are liable to imprisonment for a period of not less than thirty days nor more than six months, or to a fine of not less than $100 nor more than $1,000, or both such fine and imprisonment in the discretion of the court. See MCL 211.21. CAUTION: Read these instructions carefully before filling this form out. YOU MUST COMPLETE ALL SECTIONS. Because this form has been coded, it is imperative that it be returned to assure proper processing. If personal property formerly in your possession has been removed from this assessing unit before December 31, 2000, it is imperative that you notify the assessor at once in order that records pertaining to your property may be changed accordingly. This statement is subject to audit by the State Tax Commission, the Equalization Department or the Assessor. FAILURE TO FILE THIS FORM BY ITS DUE DATE WILL JEOPARDIZE YOUR RIGHT TO FILE A SECTION 154 APPEAL WITH THE STATE TAX COMMISSION. You are advised to make a copy of the completed statement for your records. FACSIMILE SIGNATURES: This form must be signed at the bottom of page 1. P.A. 126 of 1996 provides that a facsimile signature may be used provided the person using the facsimile signature has filed with the State Tax Commission a signed declaration, under oath, using form 2995. This form can be obtained by writing the Commission at P. O. Box 30471 Lansing MI 48909-7971. A facsimile signature is a copy or a reproduction of an original signature. GENERAL EXPLANATION - The Michigan Constitution provides for the assessment of all real and tangible personal property not exempted by law. Tangible personal property is defined as tangible property that is not real estate. Form L-4175 is used for the purpose of obtaining a statement of assessable personal property for use in making a personal property assessment. Michigan law provides that the assessor must send form L-4175 to any person or entity that may possess assessable personal property. Michigan law also provides that a person or entity receiving a form L-4175 must complete it and return it to the assessor by the statutory due date, even if they have no assessable property to report. If you had assessable personal property in your possession on December 31, 2000, you must submit a completed form L-4175 to the assessor of the community where the property is located by the statutory due date, even if the assessor does not send you a form to complete. COMPLETION OF FORM L-4175 Page 1 - Statistical Information: FROM: Insert name and address of the assessor if you are using a form not provided by the assessor. Often this form must be filed at an address different than the assessor’s mailing address for other purposes. It is your responsibility to assure that this form is sent to the correct address. If you are unsure of the mailing address, call your local assessor or county equalization department. TO: If you are not using a pre-printed form, insert your name and address. Use the address at which you wish to receive future forms and tax billings. If your form is pre-printed with an incorrect address, line out the incorrect portions and write the corrections. Parcel No. – Unless this is an initial filing, you have already been assigned a parcel number. If you are using a form not provided by the assessor, you must insert the correct parcel number. Failure to insert your parcel number may result in a duplicate assessment. Location(s) of Personal Property Reported … - List the street addresses of all locations that are being reported on this statement. Locations in different school districts or lying within the boundaries of designated authorities or districts must be reported separately. All locations in the same authority or district must be reported under one account, unless the assessor has directed otherwise. You must file a separate statement for property on which the tax is abated pursuant to P.A. 198 of 1974 (I.F.T.) or P.A. 328 of 1998 (certain new personal property). Legal Name of Taxpayer – Insert the exact legal name of the taxpayer. Address Where Personal Property Records Are Kept – Insert the address where the records used to complete this statement are kept. Do not insert the address of an agent unless that agent has actual possession of all documents necessary to conduct an audit. Name of Person in Charge of Records – Insert the name of the person at the address where the records are kept who has actual control of the documents necessary to conduct an audit. Telephone No. – Insert the telephone number of the person having charge of the records used for filing. Description of Taxpayer’s Business activity – Insert a descriptive phrase indicating the nature of the taxpayer’s business activity. Square Feet Occupied – Insert the number of square feet of space occupied by the taxpayer at the location(s) reported. Preparer’s Name and Address – Insert the name, address and telephone number of the person who has prepared this statement. (Check One) – Check the appropriate box indicating the form of legal organization used by the taxpayer in conducting its business. If the taxpayer is organized as a corporation or a limited liability company, insert the Michigan corporate identification number of the business or, if not authorized to do business in Michigan, the name of the state in which it is organized. Michigan Sales Tax No. – Insert the taxpayer’s Michigan Sales Tax Number. Date of Organization – Insert the date that the taxpayer’s business was first organized or commenced. Date Business Began at Above Location – Insert the date that the taxpayer first commenced business at a location reported on this statement. Assumed Names Used by the Legal Entity, if any –State any assumed names used by the taxpayer in conducting its business at the location(s) reported. Names of Owners or Partners – If the taxpayer is a sole proprietorship or a partnership, list the name(s) of the proprietor or partners. If Sole Proprietorship, Taxpayer’s Residential Address – Insert sole proprietor’s actual residence address. Do not use mailing address, if different than residence address. Page 1 – Summary and Certification: Page 1, Line 1: “Special Tools” are exempt from taxation, pursuant to MCL 211.9b. If you are excluding “special tools” from your statement, you must check “Yes” and insert the amount of original cost excluded. “Special tools” means those dies, jigs, fixtures, molds, patterns, gauges, or other tools which meet the requirements of the State Tax Commission’s definition of “special tools.” For guidelines in determining whether an item is a “special tool”, refer to Page 15-6 of Vol. III of the Assessors Manual. Generally, a “special tool” can be used to make a part for, or to fabricate or assemble, only one product, and its usefulness ends when a pre-planned, periodic, model changeover of the product occurs, such as happens in the automobile industry. An item is probably not an exempt “special tool” if the item is NOT a device such as a die, jig, fixture, mold, pattern or gauge OR if the item is used for a purpose other than the actual manufacturing of the product, OR if the product made with the item is not subject to preplanned model changeover OR if the item can be used to produce a different part after the model changeover has occurred. Dies, jigs, fixtures, molds, patterns, gauges, or other tools that are not “special tools” should be reported at full acquisition cost new under Section H of this form. Page 1, Line 2: Air and water pollution control facilities and/or wind or water energy conservation devices may qualify for exemption from taxation, but only if an exemption certificate has been issued by the State Tax Commission on or before December 31, 2000. If you claim such an exemption, check “Yes” and attach an itemized listing of the certificate numbers, dates of issuance and amounts. Page 1, Line 3: You are obligated to file a completed form L-4175 with the assessor of every Michigan assessment jurisdiction in which you had assessable personal property on December 31, 2000. If you have fulfilled this obligation you should check “Yes”. If you have not filed in every required jurisdiction, attach an explanation. Page 1, Line 4: The purpose of this question is to determine whether you are a party to a contract relative to personal property located in this jurisdiction on December 31, 2000 that you have not reported on this statement, perhaps because of your belief that another party to the contract is the proper party to report. This includes situations where you believe you hold only a security interest in personal property, in spite of the fact that the contract is labeled a “lease.” If you answered “yes” to this question, attach a rider that includes the name(s) of the interest holder(s), the nature of your interest, a description of the equipment, the year the equipment was originally placed in service, its original selling price when new and the address where the property was located on December 31, 2000. Page 1, Line 5: Check “Yes” if you are a lessor (landlord), a lessee (tenant) or a sub-lessee (sub-tenant) in a rental contract relating to the real property at this location. MCL 211.8(i) provides that, under some circumstances, the value, if any, of a sub-leasehold estate shall be assessed to the lessee. If you checked “Yes” to this question, complete Section O. Your rental arrangement will be analyzed by the assessor. Further, MCL 211.8(h) provides that, to the extent that improvements made to real property by a lessee add value to the property but are not assessed as part of the real property, they may be assessable to the lessee. If you checked “Yes” and have made leasehold improvements to the real estate, you must also complete Section M. Your completion of Sections M and O will not necessarily result in an increased assessment. Page 1, Line 6: The valuation multipliers contained in Sections A through F on Page 2 are intended to be applied to the acquisition cost of new personal property, not the acquisition cost of used personal property. If the acquisition cost new of an asset is known to you or can be reasonably ascertained through investigation, you must report that cost in the year it was new when you complete Sections A through F, even if you have adjusted the cost in your accounting records to reflect revaluation of the asset using a “purchase,” “push-down” or similar accounting methodology or even if your booked cost reflects a “used” purchase, lease “buy-out” price or a “trade-in” credit. If you were unable to report the acquisition cost new for one or more of your assets, you should check “Yes” and attach a list of all such assets. On the list, provide a detailed description of each asset, the year or approximate year that the asset was new, and the amount and acquisition year at which you have reported the asset. You must also provide a written explanation of the reason(s) that the original acquisition cost information is not available. Page 1, Line 7: “Daily rental property” is tangible personal property, having a cost NEW of $10,000, or less, that is exclusively offered for rental, pursuant to a written agreement, on an hourly, daily, weekly or monthly basis for a term of 6 months or less (including all permitted or required extensions). If you acquired the property “used” you must determine the cost new for purposes of determining whether the property qualifies for “daily rental property” treatment. If you believe that you have such property, see form 3595 for additional information. If you qualify you must complete form 3595 and comply with the requirements set forth therein. Page 1, Line 8: You are required to report all tangible personal property in your possession in this location EVEN IF THE PROPERTY HAS BEEN FULLY EXPENSED OR DEPRECIATED FOR FEDERAL INCOME TAX OR FINANCIAL ACCOUNTING PURPOSES. If you answer “No” attach a detailed explanation. Page 1, Line 9: This question requires you to disclose other businesses that share space with you at the location(s) of your business. If you answer “Yes” attach a list of all other businesses operating at your location(s). If you are located in a shopping center, office building or other multi-tenant facility, you are not required to list businesses having a different legal address. Page 1, Line 10: Complete Sections A through F, page 2, and add the Totals from Sections A through F to arrive at a Cost Grand Total. Insert the Cost Grand Total in the box indicated at the bottom of Page 2 and carry that amount to Page 1, Line 10a. Page 1, Line 11: Complete Sections G through K, page 3, and add the Totals from Sections G through K to arrive at a Cost Grand Total. Insert the Cost Grand Total in the box indicated at the bottom of Page 3 and carry the amount to Page 1, Line 11a. Page 1, Line 12: Complete Sections L through O, page 4, and add the Totals from Sections M and N to arrive at a Cost Grand Total, as directed by the instruction at the bottom of the page. Insert the Cost Grand Total in the box indicated at the bottom of Page 4 and carry the amount to Page 1, Line 12a. Page 1, Line 13: If you had assets that qualified as “idle equipment” or as “ obsolete or surplus equipment” on December 31, 2000, complete form 2698 and carry the Total Original Cost from form 2698 to line 13a. “Idle equipment” is equipment that has been disconnected and is stored in a separate location. Assets are NOT “idle” if they are present as stand-by equipment, are used intermittently or are used on a seasonal basis. “Obsolete or surplus equipment” is equipment that either requires rebuilding and is in the possession of a rebuilding firm on December 31, 2000 OR is being disposed of by means of an advertised sale because it has been declared as surplus by an owner who has abandoned a process or plant. For more information, see also instructions to form 2698. Do not include these assets elsewhere on this form. Page 1, Line 14: Report the total cost incurred for Construction in Progress, as calculated on an accrual basis, based on the extent of physical presence of the construction in progress in the assessment jurisdiction. Construction in Progress is property of a personal property nature that was in the process of being installed, and was not in service, on December 31, 2000. Page 1, Line 15: If you had cable television or public utility assets on December 31, 2000, complete form 3589 and carry the Total Original Cost from form 3589 to line 15a. See also the instructions to form 3589. Page 2 - General Instructions to Sections A through F: You must report on these Sections the full acquisition cost new, in the year of its acquisition new, of all machinery and equipment, computer equipment, furniture and fixtures, signs, coin operated equipment, office equipment, electronic, video and testing equipment, rental video tapes and games and other tangible personal property owned by you and located in this assessment jurisdiction, even if you have fully depreciated the asset or have expensed the asset under Section 179 of the Internal Revenue Code or under your accounting policies. All costs reported must include freight, sales tax and installation. You must also report in these Sections any other tangible personal property in your possession or under your control in this jurisdiction that is not reported under Sections G through N. If you purchased an asset used, and do not know and cannot ascertain the acquisition cost new, attach the list required by the instruction to Page 1, Line 6. The acquisition costs for the assets reported under each Section must be totaled for each acquisition year. Place the yearly total on the line of the Section corresponding to the year that the property was acquired. You must report the original acquisition cost, not your estimation of the value of the property. Equipment not fully installed on December 31, 2000 should be reported on Page 1, Line 14 and should not be reported on these Sections. Property that was reported as construction in progress LAST year but which was placed in service on or before December 31, 2000 should be entirely reported on the 2000 acquisition line of the appropriate Table, not the 1999 line. Similarly, the cost of all assets must be reported as acquired in the year that they were placed in service, rather than the year of purchase, if those years differ. Leased assets and “daily rental property” must be reported by the OWNER on Sections A through H in the same manner as other property. An itemized listing of the property must also be made on Section L (for leased assets) or pursuant to the requirements of the instructions for Page 1, Line 7 (for daily rental assets). All leased and daily rental assets must be reported by, and must be assessed to, the owner, in spite of any agreement to the contrary between the parties to the lease or rental agreement, unless the property is “qualified personal property” or is owned by a bank. Leased and rental property must be reported at selling price new, even if the owner is the manufacturer of the asset or acquired the asset in the wholesale market for an amount less than the price that the end-user would have incurred to purchase the asset. If the asset is of a type that it is never sold to an enduser or if you have constructed the asset for your own use, report the price at which the asset would sell if a market sale did occur. See STC Bulletin 1 of 1999. The cost reported in each of the Sections of form L-4175 and on the forms used with form L-4175 should include the full invoiced cost, without deduction for the value of certain inducements such as service agreements and warranties when these inducements are regularly provided without additional charge. Inventory is exempt from assessment. Inventory does not include personal property under lease or principally intended for lease or rental, rather than sale. Property allowed a cost recovery allowance or depreciation under the Internal Revenue Code is not inventory. Motor vehicles registered with the Michigan Secretary of State on December 31, 2000 are exempt. Nonregistered motor vehicles and equipment attached to motor vehicles which is not used while the vehicle travels on the highway are assessable. Computer software, if the purchase was evidenced by a separate invoice amount and if the software is commonly sold separately, is exempt. A summary of the items that should be reported on each Section is provided below. For full listings refer to STC Bulletin 12 of 1999 and its later annual supplement(s). These Bulletins, along with forms and other Bulletins can be accessed at the Web site www.treasury.state.mi.us. MCL 211.19 requires that you complete form L-4175 in accordance with the directions on the form and these instructions. You may, however, attach supplementary material for the assessor to consider in making his or her valuation decisions. If you have questions regarding proper classification you must contact your local assessor or the State Tax Commission for clarification. Completion of Section A, Page 2: The assets to be reported on this Section include decorations, seating, furniture (for offices, apartments, restaurants, stores and gaming establishments), shelving and racks, lockers, modular office components, cabinets, counters, rent-to-own furnishings, medical exam room furnishings, therapeutic medical beds and bedding, bookcases, displays, mobile office trailers, special use sinks (such as those found in medical offices, beauty shops and restaurants), tables, non-electronic recreational equipment, filing systems, slat walls, signs, window treatments, uniforms and linens, cooking, baking and eating implements, shopping carts, booths and bars. Other assets may be included at a later time. Completion of Section B, Page 2: The assets to be reported on this Section include all assets that are not designated for disclosure on another Section. Specifically, such assets include the following types of machinery and equipment: air compressors, airport ground, non-coin operated amusement rides and devices, auto repair & maintenance, beauty and barber shop, boiler, furnace, bottling & canning, crane and hoist, car wash, chemical processing, construction, unlicensed vehicular, conveyor, non-coin operated dry cleaning and laundry, air makeup and exhaust systems, manufacturing and fabricating, food processing, gym & exercise, heat treating, landscaping, sawmill, incinerators, maintenance and janitorial, non-electronic medical and dental and laboratory and veterinary equipment, mining and quarrying, mortuary & cemetery, painting, hydrocarbon refining and production and distribution, plastics, pottery & ceramics, printing and newspaper, rubber manufacturing, scales, ski lifts, smelting, stone & clay processing, supermarket, textile, tanning, vehicle mounted, waste containers, wire product manufacturing, woodworking, automated tellers (ATM), computer controlled lighting, CNC controlled manufacturing, theater equipment, restaurant food preparation and dispensing and storing and serving equipment, soft drink fountains, coin counters, beverage container return machines, storage tanks, hand tools of mechanics and trades, non-registered motor vehicles, freestanding and other safes not assessed as real property, oil and gas field equipment and gathering lines prior to commingling product with other wells, portable toilets, portable saw mills, LP tanks, fuel dispensing control consoles, computer-controlled printing presses, stereo lithography apparatus, forklift trucks, non-coin operated gaming apparatus and computerized and mechanical handling equipment. Other assets may be included at a later time. Completion of Section C, Page 2: Report the acquisition cost new and the year of acquisition of rental videotapes, rental video games, rental DVD’s and rental laser disks owned by you at this location. Other assets may be included at a later time Completion of Section D, Page 2: The assets to be reported on this Section include office machines, non-computerized cash registers, copiers, faxes, mailing and binding equipment, photography and developing equipment, shredders, projectors, telephone and switchboard systems, audio and video equipment (used for receiving, transmitting, recording, producing and broadcasting), amplifiers, CD, cassette and disc players, speakers, cable television local origination equipment, electronic scales, surveillance equipment, electronic diagnostic and testing equipment (for automotive shops, medical offices, hospitals and dental offices), ophthalmology testing equipment, satellite dishes, video-screen arcade games, electronic testing equipment, electronic laboratory equipment, cellular transmitter site equipment (except towers and land improvements and items reported under other sections of form L-4175 - See STC Bulletin 3 of 2000), cellular telephones, medical laser equipment, movable dynamometer, spectrum analyzer, security systems, 2-way and mobile land radio equipment, pay-per-view systems, wooden pallets and distributive control systems (see STC Bulletin 3 of 2000). Other assets may be included at a later time. Completion of Section E, Page 2: The assets to be reported on this Section include consumer coin-operated equipment such as bill & change machines, juke boxes, pin ball machines, coinoperated pool tables and other non-video arcade games, snack & beverage machines, other vending machines, news boxes, laundry equipment and slot machines. Other assets may be included at a later time. Completion of Section F, Page 2: The assets to be reported on this Section include personal and midrange and mainframe computer and peripheral equipment, including servers, data storage devices, CPUs, input devices such as scanners and keyboards, output devices such as printers and plotters, monitors, networking equipment, computerized point of sale terminals, global positioning system equipment, lottery ticket terminals, gambling tote equipment, pager instruments, and cable television converters. A programmable logic control device for a machine should be reported on Section B with the machine it serves. Other assets may be included at a later time. Cost Grand Total, Page 2: After you have completed Sections A through F, add together the Totals of cells A-1 Through F-1 to arrive at a Cost Grand Total. Insert the Cost Grand Total in the box indicated at the bottom of Page 2 and carry to Page 1, Line 10a. Section G, Page 3: Report all non-exempt tangible personal property owned by you at this location that is not entitled to depreciation/cost recovery under the United States Internal Revenue Code or that the assessor has told you to report in this section or that otherwise presents special valuation problems. An example of property not entitled to depreciation/cost recovery is fine art. Examples of properties that represent special valuation problems are: frequently supplemented professional books, feature motion picture films, audio and video productions not sold to the public at large and toll bridge company structures. Provide all requested information. An inspection of the property may be necessary. Property reported in this Section should not be reported elsewhere on form L-4175. Section H, Page 3: Assessable tools, dies, jigs, fixtures, molds, patterns and gauges and other manufacturing requisites of a similar nature (commonly referred to as “tooling”) will be valued at an amount equal to the net book value of the asset. Report both Acquisition Cost New and GAAP net book value by year of acquisition on this Section. See Instructions to Line 1, Page 1 for information regarding the tooling that is assessable. For purposes of personal property reporting, net book value shall be as determined using generally accepted accounting principles, in a manner consistent with the taxpayer’s established methods of depreciation. The net book value for federal income tax purposes shall not be used for purposes of personal property tax reporting. If an accounting change in estimate is indicated relating to a particular asset, the net book value of that asset, as reported for personal property assessment purposes, shall be the value that would have existed for that asset on December 31, 2000 if a correct estimate had originally been made. Your obligation to implement the change in estimate for personal property reporting purposes shall not be affected by a determination that no financial accounting change in estimate is necessary due to lack of materiality. In no event shall assessable tooling be reported at an amount less than is indicated by its expected remaining useful life plus salvage value (if applicable under the depreciation method used). Section I, Page 3: Report “qualified personal property” in this Section. Do not report “qualified personal property” in Sections A through E. “Qualified personal property” is property that was made available to you by a “qualified business” (usually a leasing company or a finance company) and which is not assessable to the “qualified business.” Such property is assessable to you as the user. The requirements for “qualified business” treatment are strict and many leasing and financing companies do not qualify. Further, such treatment only applies to property subject to an agreement (usually labeled a lease) entered into after December 31, 1993 that qualifies for treatment as “qualified personal property”. The “qualified business” is required to have filed a statement with the assessor by February 1st of the current year and is required to have made a written agreement with you in which it is specifically agreed that you will report the property to the assessor as “qualified personal property.” See MCL 211.8a. Section J, Page 3: Report all business machines, postage meters, machinery, equipment, furniture, fixtures, tools, burglar alarms, signs and advertising devices and other tangible personal property that you are renting or leasing from another person or entity. Provide all of the information requested for each lease. You must provide the actual or estimated selling price new of the asset so that control totals can be generated for use on the Summary and Certification portion of Page 1. MCL 211.13 provides that all tangible personal property shall be assessed to the owner thereof, unless the owner is not known. A personal property statement will be sent to the owner. Property reported in this Part should not be reported elsewhere on form L-4175. Section K, Page 3: Report all machines, meters, machinery, equipment, furniture, fixtures, tools, signs and advertising devices that are in your possession but are not owned, leased or rented by you. Examples include equipment left with you by vendors, such as display racks, coolers or fountain equipment, property loaned to you by another, property left with you for storage or rebuilding, consigned equipment not held for resale and assets sold but not yet picked up by the purchaser. Provide all of the information requested for each asset. You must provide the actual or estimated selling price new of the asset so that control totals can be generated for use on the Summary and Certification portion of Page 1. MCL 211.13 provides that all tangible personal property shall be assessed to the owner thereof, unless the owner is not known. A personal property statement will be sent to the owner. Cost Grand Total, Page 3: After you have completed Sections G through K, add together the Totals of cells G-1 through K-1 to arrive at a Cost Grand Total. Insert the Cost Grand Total in the box indicated at the bottom of Page 3 and carry to Page 1, Line 11a. Section L, Page 4: This Section is to be completed by leasing companies and others who lease personal property to others. In addition to completing this Section, you must complete Sections A through F and any other Sections that are applicable. You may use attachments rather than completing this Section, but only if your attachment provides all the information requested on this Section and if you insert the Total Original Selling Price where required on the form. Section M, Page 4: This Section is to be completed by tenants who are renting or leasing real property. All improvements (leasehold improvements) you have made to the real property should be reported, even if you believe that the improvements are not subject to assessment as personal property. Provide as much detail as possible so that the assessor can determine whether an assessment should be made. You may use attachments, but only if your attachment provides all the information requested in this Section and if you insert the Total Cost Incurred where required on the form. See the instruction for Line 5, Page 1 for additional explanation. Section N, Page 4: Report the total capitalized cost and year of construction of buildings and other structures you have placed on leased or on public lands or rights-of-way. Freestanding communications towers, associated equipment buildings and freestanding billboards are examples of other structures that are to be reported. The reported cost must include all costs capitalized on your records. See STC Bulletin 1 of 1999. Section O, Page 4: Landlords and tenants must provide rental information relating to lease arrangements to which they are a party. Do not report lease or rental arrangements relating to property occupied for residential purposes. IF you are a landlord with multiple properties, contact the assessor to arrange an acceptable alternative reporting method. See Instructions to Line 5, Page 1. Cost Grand Total, Page 4: After you have completed Sections M and N, add together the Totals of cells M-1 and N-1 to arrive at a Cost Grand Total. Insert the Cost Grand Total in the box indicated at the bottom of Page 4 and carry to Page 1, line 12a. *NOTE: MCL 211. 19 states that personal property statements must be completed and delivered on or before February 20 of each year.
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