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HB 6006

Property tax: personal property; retail sales and food processing operations; exempt from personal property tax. Amends sec. 9 of 1893 PA 206 (MCL 211.9).

2025-2026 Regular Session Introduced by Mike Mueller

HB 6006 would expand and specify personal property tax exemptions for farm-related energy and processing equipment, like methane digesters and biomass systems, subject to MAEAP and

bill electronically reproduced 05/21/2026
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Bill Summary · HB 6006

Overview

House Bill 6006 (2025-2026) from Michigan proposes amending Section 9 of 1893 PA 206 (The General Property Tax Act) to exempt from personal property tax certain categories of property used in retail sales and food processing operations. The bill focuses on extending or clarifying exemptions related to agricultural operations and related processing equipment, and adds detailed conditions for methane digester, biomass, and other energy-related systems tied to farming operations.

  • Sponsor: Rep. Mike Mueller (co-sponsor)
  • Committee: Finance
  • Introduced: May 21, 2026

Main purpose and intent

  • To exempt specific types of personal property (and related farm/operational equipment) from personal property taxation when used in agricultural operations and certain processing or energy-generation activities.
  • To authorize targeted exemptions for farm-related energy and processing equipment (e.g., methane digesters, biomass systems, thermal depolymerization, and related machinery) under specified conditions.
  • To clarify exemption boundaries, ensuring that items used in income-producing activity or for sale remain taxable, while qualifying farm and processing assets may be exempt.

Key provisions and changes

  • Exemption framework (Sec. 9(1)): The bill reiterates and enumerates multiple exemptions for personal and certain real property, including for

    • Charitable, educational, and scientific institutions
    • Library properties
    • Various veterans, youth, and fraternal organizations
    • Pensions receivable from the United States
    • Indian property, householder personal property, household furnishings, tools, and other items with specified monetary caps
    • Farm-related properties and agricultural operations (subject to caps and usage rules)
    • Public warehouse/bonded warehouse properties in transit, with procedures for exemption certifications and reporting
    • Bank-owned property, and other listed categories such as sugar produced by processors, parent cooperative preschools, wood-harvesting equipment, LP gas tanks for residential use, water conditioning systems, etc.
    • Aircraft and solar energy facility exemptions (for specific post-2000 tax years and under solar energy facility exemption certificates)

  • Agricultural operations exemption (subsection (j)): The provision explicitly covers property used in agricultural operations and farm implements held for sale or resale by retail servicing dealers for use in agricultural production, with several nested subcategories detailing specific exemptions and controls. Notably:

    • Exempts farm assets used in agricultural production but excludes items used in retail sales and food processing operations from this exemption (emphasizes a boundary between farming activities and processing/sales activities).

  • Methane digester and related systems (subparagraphs (i) and related in (j)):

    • Methane digester and methane digester electric generating system exemptions require:
    • An application to the local tax collecting unit after completion, with certification from the Department of Agriculture and Rural Development (MADRD) that the farm operation complies with the Michigan Agriculture Environmental Assurance Program (MAEAP) in the prior year.
    • A biennial/tri-annual affidavit (initially three years after approval, then every three years) confirming MAEAP compliance.
    • Certification from the Department of Environment, Great Lakes, and Energy (EGLE) that the applicant is not under environmental violation investigations or significant penalties (certain criminal/civil violations restricted over defined look-back periods).
    • Cooperative information sharing with universities to monitor effectiveness of the methane digester system, with privacy protections for farm identities.
    • Operation under certified personnel supervised by MADRD-certified operators; the state agencies (MADRD, EGLE, and MSU Extension) coordinate on operator certification.

  • Other eligible energy/processing machinery (subparagraphs (ii)–(vii) under (j)):

    • Biomass gasification systems
    • Thermal depolymerization systems
    • Machinery capable of harvesting grain or biomass for energy purposes
    • Machinery used to prepare crops for market (subject to processing limits and farmer-owned production thresholds)
    • Machinery for tile installation or soil/water conservation on qualified agricultural property, with required documentation of exempt use percentage

  • In-transit and port-related exemptions (subsection (l)):

    • Personal property in transit or stored in public warehouses/port facilities under transit designations may be exempt if properly filed, with reporting requirements and penalties for noncompliance.
    • Specific reporting requirements include tracking shipment destinations, costs, and timely filing with assessing officers; fines apply for failures to report or misclassification.

  • Other exemptions (subsections (a)–(s)):

    • A broad set of exemptions for not-for-profit entities, libraries, veterans organizations, personal property under household or farm use, and various equipment used in defined contexts (e.g., wood harvesting equipment, water conditioning systems, solar facilities).

Affected parties

  • Agricultural producers and farm operators (primary beneficiaries in relation to exemptions for farm property and agricultural processing machinery, including methane digesters and biomass systems).
  • Property owners of methane digester installations and other energy-generating farm equipment (subject to compliance, certification, and oversight requirements).
  • Local tax collecting units (assessing officers) responsible for processing exemption applications, affidavits, and enforcement.
  • State agencies involved in oversight and certification:
    • Department of Agriculture and Rural Development (MAEAP certification and operator oversight)
    • Department of Environment, Great Lakes, and Energy (environmental compliance certifications)
    • Michigan State University Cooperative Extension Service (stakeholder involvement)
  • Public universities that may access information for evaluating methane digester systems (with privacy protections).

Procedural and timeline considerations

  • Application and certification: Exemption for methane digester/electric generating system requires an application after construction and certification from MADRD that MAEAP compliance is met in the prior year.
  • Affidavits: Initial affidavit due three years after approval, then every three years, confirming ongoing MAEAP compliance.
  • Environmental and criminal/civil checks: Certification from EGLE required at the time of application, with look-back periods for prior violations or fines under environmental statutes.
  • Information sharing: Limited to universities for evaluating system effectiveness; identity protections to maintain confidentiality.
  • Reporting requirements and penalties: Duty to report shipment destinations and values within 90 days post-shipment; penalties include fines for non-reporting and for failure to report property in transit; taxes may be reassessed if inappropriately exempted.
  • Clarifications on eligibility: The bill maintains that farm operations must meet thresholds (e.g., $25,000 annual gross wholesale sales for agricultural operations) and specifies that processing/sales operations are excluded from certain exemptions, maintaining distinctions between farming activities and processing/retail operations.

Summary of impact

HB 6006 aims to broaden and specify personal property tax exemptions for agricultural and related processing/energy equipment, with a focus on methane digesters and biomass systems, provided operators meet environmental and certification requirements. It adds detailed procedural steps, compliance checks, and reporting duties to ensure exemptions are properly granted and tracked, while maintaining clear boundaries between farm operations and retail food processing activities. The bill would affect farm operators, exempt-eligible equipment, local assessors, and the state agencies responsible for environmental and agricultural program oversight. The net effect is a more defined pathway for tax exemptions tied to sustainable agricultural energy projects, subject to ongoing verification and reporting.

Compiled from official sources — confirm details with the bill’s official record.

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