Essential Services Assessment (ESA) filing and payment dates
Michigan Public Acts 541 and 505 of 2018 were signed into law on Dec. 27, 2018. These pieces of legislation established changes to filing and payment dates for the ESA for assessment years starting in 2019.
Certification and payment of the ESA is due on or before August 15 of the assessment year in which the exemption is being claimed. Prior to the 2019 assessment year, the Eligible Manufacturing Personal Property (EMPP) exemption was rescinded by the Department of Treasury, if the ESA, including any late payment penalty, wasn’t certified and paid in full by October 15 of the assessment year in which the exemption was being claimed.
Under the new laws, the late payment date to avoid recession action has been changed from October 15 of the assessment year to April 15 of the year subsequent to the assessment year. If this payment isn’t received by April 15, the Department of Treasury will rescind the EMPP exemption. If a taxpayer wishes to appeal an assessment, penalty, or recession of exemption, the deadline for appeal to the Michigan Tax Tribunal has been extended to December 31 of the year subsequent to the assessment year. These acts did not make changes to the deadline to annually file the EMPP exemption (Form 5278) with the applicable local governmental units. This deadline remains as February 20.
Additionally, the original payment due date to avoid penalty remains August 15 of the assessment year.
Public Acts 541 and 505 also increased the late payment penalty of an ESA statement that’s not fully paid by August 15. The penalty has been increased to 3 percent of unpaid liability per month or part of a month, with a maximum of 27 percent. This penalty is not prorated based on the day of the month that the late payment is received by the state.