As Independence Township’s biggest manufacturer, Magneti Marelli looks to benefit from voters’ approval of Proposal 1 last August.
The proposal eliminates the state use tax on businesses’ out-of-state purchases. The tax will be replaced with sales tax revenue.
Stephane Vedie, Magneti Marelli Holding USA president and CEO, said the new law will be a consideration as the manufacturer expands.
“For sure,” he said. “It supports investment and facilitates expansion ? there is still available capacity at the facility. We’re confident we will build capacity and fill the plant.”
Several states are eliminating personal property tax to help attract business, said Paul Brown, Independence Township treasurer.
“It was sold as a tax break for business ? that’s exactly what it was,” Brown said. ‘It’s big for manufacturing. That’s where the biggest impact is.?
As the new system takes effect, its effect on Independence Township government funding will be small, the treasurer said.
Independence Township is mostly residential, and mom-and-pop businesses of less than $80,000 are not affected by the measure, he said.
Magneti Marelli, however, has millions in equipment and is at only half capacity so far.
‘Over the next few years as the law takes effect, it would eliminate Magneti Marelli’s personal property tax,? Brown said. “So if they bring in new equipment, it wouldn’t bring new property tax, so there’s a higher chance to expand the space and work in Independence Township.?