Taxes & Incentives
Corporate Income Tax – 6.0%
Sales Tax – 6.0%
Tax Burden – 9.84%
SBA 504 Loans
The loan program can provide up to $5 million based on job creation, public policy or up to $4 million for small manufacturing for projects based on fixed asset needs with terms up to 10-20 years. In order to be eligible for financing a firm must have a net worth of less than $15 million and average net income (after taxes) not in excess of $million. Interest rates on 504 loans are pegged to an increment above the current market rate for 5-10 year US Treasury issues.
SBA 7A Loans
This program will finance either working capitol or fixed assets. The program provides a conventional lending institution with up to 75-85% guarantee. In general, the following provisions are maximum loan maturity has been established 25 years for real estate, up to 10 years for equipment, and up to 7 years for working capitol. Maximum loan is $5 million.
Industrial Revenue Bonds
Industrial Revenue Bond financing is available through local Economic Development Corporations. The economic development team members can actively assist in finding a purchaser for the bonds. Interest rates are established by the market.
Community Development Block Grants
This program is provided by the State of Michigan and allows a county, city, village or township to apply for a grant to assist companies with infrastructure needed to expand or start their business. Private match, local match, and job creation are al required.
Brownfield Authorities have been established to assist to redevelop Brownfield properties. A Brownfield site is defined as real property, the expansion redevelopment or reuse of which may be contributed by the presence of a hazardous substances, pollutant, or containment. Check with your local economic development office for assistance.
Industrial Tax Abatement
Tax abatements are available for manufacturing firms making a capitol investment in real or personal property. Companies are eligible for the exemption even if they are renting a facility, provided they are responsible for paying the taxes. A 50% abatement on ad valorem taxes may be granted for new construction and the purchase of equipment for up to 12 years. This is granted in exchange for jobs created by the firm.
PACE (Property Assessed Clean Energy) Financing
Huron County has recently announced its participation in the PACE Financing program. PACE financing allows longer payback periods with lower annual amortization and better terms, making many energy project financeable that otherwise would not be. For more information, visit Lean & Green Michigan’s website.