Sterling, Chrysler clash over tax exemption
Published June 14, 2013
A dispute between Sterling Heights and Chrysler Group LLC over a tax exemption will soon come under a state agency’s inspection.
According to Sterling Heights City Attorney Jeff Bahorski, Macomb County Circuit Court Judge Peter Maceroni ruled June 3 to vacate the Michigan Tax Commission’s earlier Chrysler tax exemption decision and remand the case back to the agency for a technical analysis by the Michigan Department of Environmental Quality.
Bahorski said the DEQ will review the matter and help determine whether paint facilities at Chrysler’s Sterling Heights Assembly Plant, on Van Dyke north of 16 Mile Road, are eligible for a tax exemption related to pollution control. He said he is not sure how long it will take the DEQ to perform its evaluation.
“We’re obviously pleased that the appeal has been granted, and we look forward to the DEQ performing the analysis that we felt should have occurred in the first place,” he said.
Bahorski said the Michigan State Tax Commission granted the exemption certificate to Chrysler last December. However, Sterling Heights officials disagreed with the suitability of the exemption and quickly appealed the decision to Macomb County Circuit Court the following month.
The city believes that the arrangement granted Chrysler tax relief of around $900,000 in annual taxes to all of its taxing jurisdictions. About $300,000 of that would normally go to the city of Sterling Heights every year, Bahorski said.
Bahorski explained that such an exemption, when granted, typically lasts for the productive life of the equipment or property that qualifies.
The dispute comes during a time when Sterling Heights is searching for revenue. The city is placing a 2.5-mill proposal on the November ballot for public safety and roads.
Kevin Frazier, a Chrysler spokesman, presented an email statement on behalf of his company. The statement said Chrysler is proud that its investment in the assembly plant’s painting capabilities “includes state-of-the-art pollution control facilities.”
“The state of Michigan provides businesses with air pollution control tax exemptions for investments in buildings and equipment in an effort to promote a cleaner, healthier environment for its residents,” the statement said.
“Many employers, including Chrysler, have qualified for this exemption. In fact, in the same year the Michigan State Tax Commission granted Chrysler’s request for the property tax exemption, it reportedly granted 32 similar requests to other employers.”
Frazier added that his company values its partnership with Sterling Heights and its residents.
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