Michigan rental operators of construction and other heavy equipment have scored a major win. House bills 4833 and 4834, which remedied the personal property tax issue that has been plaguing rental operators for years, were signed into law Thursday, March 24, by Gov. Gretchen Whitmer. The laws go into effect Jan. 1, 2023, and guidance will be forthcoming from the state.
This victory comes after a five-year battle with the support of the American Rental Association (ARA), the Michigan Heavy Equipment Rental Tax Coalition, state agencies and members of the ARA of Michigan.
Scott Irwin, president, Delux Rental, Ypsilanti, Mich., who serves as president on the American Rental Association (ARA) board, and Sue Irwin, vice president of the company, and ARA of Michigan president, both testified along with other rental operators in June 2021 at the state Capitol in Lansing before the Michigan Local Government and Municipal Finance Committee.
According to the Irwins, the system that has been in place put rental operators in Michigan at a competitive disadvantage with those in surrounding states like Wisconsin, Illinois, Minnesota and Ohio that do not levy such a tax.
“Equipment from those states is often brought into Michigan and used on construction projects without having to pay the tax. House Bill 4833 and House Bill 4834 were needed to put Michigan on an equal footing with other states, make equipment rental businesses more competitive and ensure that Michigan is supplying the needs of Michigan construction projects,” Sue says.
It was truly a team effort, according to Alysia Ryan, ARA director of government affairs. “In addition to the testimony, the Irwins and others in the state also visited legislators and sent letters supporting the passage of these bills. Everyone has been pushing for this for a long time,” she says.
The importance of this achievement cannot be understated, Scott notes. “The large infrastructure bill passed by Congress in 2021 will necessitate that equipment rental companies invest in more and newer equipment to keep pace with increased construction projects. Now we can do that and hire more employees from Michigan to meet the needs of the state,” he says.
With these bills signed into law, “Michigan equipment rental companies can become stronger, more competitive and better able to hire employees. It enables us to supply more and newer equipment that the state needs while providing local governments with the revenues they need. It’s a win-win for everyone in the state,” he adds.