Local Tool & Die Companies Benefit from Expanded Legislation

In 2004, the State of Michigan amended P.A. 376 of 1996 (The Michigan Renaissance Zone Act) to allow for an additional 10 tool and die recovery zones, bringing the total up to 35 zones. Businesses that qualify under the legislation are eligible to receive an exemption, from 5 to 15 years, on a number of taxes including: the Michigan Business Tax, state education tax, personal and real property taxes and local income taxes where applicable. Companies are not exempt from the Michigan sales tax, special assessments, taxes mandated by the federal government and local bond obligations. The purpose of this legislation is to help support the tool and die industry which is an indispensable part of the states most productive sector – manufacturing.

Tool and die companies that enter into a collaborative must adhere to a number of practices aimed at helping them adapt and better compete in our changing economy. The key principle behind the collaborative model is to bring together synergistic companies that work together to address the following elements: sales and marketing, development of standardized processes, development of tooling standards, standardized project management methods, improved ability for specialized or niche shops to develop expertise and compete successfully for larger programs and further develop the states target industries.

To date the program has been a success. Companies that have joined collaborative's have reported a wide range of benefits as a result of learning from each other’s best practices and pursuing new strategies. Example benefits have included broadened marketing strategies aimed at entering new markets, improved manufacturing processes and the ability to bid on larger jobs as a team.

In 2009, the economic development staff with the Department of Planning & Economic Development assisted six local manufacturers to gain approval for their T&DRZ applications from the local communities. In addition to the many benefits outlined above, many of the companies are planning to invest the savings from the tax incentives into activities aimed at helping them diversifying into new industries. Currently, it is very difficult for companies to find capital and this is one program that can allow for some working capital to be freed up for such activities.

To learn more about how your company can get involved, please contact our office at 586-469-5285.