November 8, 2012
Michigan

Joining the fight on wind taxation

By Mary Drier, Staff Writer, Tuscola County Advertiser | November 7, 2012 | www.tuscolatoday.com

THUMB AREA – Some counties and townships are banning together to fight the state’s change in the way wind farms are taxed.

Tuscola County Commissioners approved an intergovernmental agreement with Sanilac, Huron, Gratiot and Mason counties to share legal expenses for litigation to appeal the decision of the State Tax Commission to change the way wind farms are depreciated and taxed.

Under the commission’s previous depreciation schedule turbines were taxed at 100 percent of their value the first year of operation and then the taxable value depreciated by five percent each year over a 15-year period, and then taxed at 30 percent thereafter.

Under the new depreciation schedule, wind turbines are taxed at 80 percent of their value the first year of operation, but then would go to 30 percent tax levy in five years.

Thumb Regional Renewable Energy Collaborative (TRREC) which is a grassroots organization consists of members from the Thumb’s counties, joined together to fight the new tax and depreciation schedule.

The taxing change on wind development is about a 27 percent reduction in revenue, which is crucial money to county, school, and township operations to help off-set revenue losses from land value declines and state revenue sharing cuts, said Tuscola county Controller Mike Hoagland.

“The change means millions of dollars of lost income for the areas with the wind farms, noted Mike Krause,” who is the former director of the Thumb Electric Cooperative, and who spearheads TRREC. “That kind of money is needs to be fought for.”

Under the intergovernmental agreement each county has agreed to pay up to $15,000 to fight the state tax commission on the change, and to have a study done showing the true taxable value of wind turbines.

TRREC also wants to fight the state’s plan to eliminate industrial personal property tax, which is paid by wind companies on their development projects. The state’s plan would be another financial blow if implemented.

Under the state’s current mandate that 10 percent of an energy company’s power come from renewable resources by 2015, about 1,250 wind turbines will be developed. And, if Tuesday’s ballot proposal of 25 percent renewable fuel by 2025 is approved, it would mean over 3,350 wind turbines, with most of the development in the Thumb area because it has the best wind.