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The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 6204 February 8, 1984 TAXATION: Exemption from ad valorem general property taxation of equipment owned by a fertilizer company and leased to and used by a farmer in agricultural operations Personal property owned by a fertilizer company and leased to and actively used by a farmer in agricultural operations is exempt from ad valorem general property taxation. Honorable Norman D. Shinkle State Senator State Capitol Lansing, Michigan You have requested my opinion upon a question involving the taxation of personal property under 1893 PA 206; MCLA 211.1 et seq; MSA 7.1 et seq. In your request you indicate that the equipment in question is owned by a fertilizer company and that it is leased to farmers for use in agricultural operations. Your question is: Whether or not the equipment of a fertilizer company is taxable or is tax exempt. 1893 PA 206, Sec. 1; MCLA 211.1; MSA 7.1, provides '[t]hat all property, real and personal, within the jurisdiction of this state, not expressly exempted, shall be subject to taxation.' In 1893 PA 206, supra, Sec. 9(j), the Legislature has delineated under what circumstances certain personal property is exempt from general property taxation: 'The following personal property shall be exempt from taxation: ' (j) Property actually being used in agricultural operations and the farm implements held for sale or resale by retail servicing dealers for use in agricultural production. As used in this subdivision, 'agricultural operations' means farming in all its branches, including cultivation of the soil, growing and harvesting of an agricultural, horticultural, or floricultural commodity, dairying, raising of livestock, bees, fur-bearing animals, poultry, or fish, turf and tree farming, and any practices performed by a farmer or on a farm as an incident to, or in conjunction with, farming operations.' Thus, personal property 'used in agricultural operations' is exempt from the general ad valorem property taxation. The exemption is not predicated upon ownership of the personal property by an entity engaged in agricultural operations. The only qualification is that the property be used in 'agricultural operations' as that term is defined in 1893 PA 206, Sec. 9(j), supra. The Legislature has not seen fit to limit the exemption to personal property owned by entities actually engaged in agricultural operations. The sole criteria for exemption is that the personal property be used in agricultural operations. It is my opinion, therefore, that personal property owned by a fertilizer company and leased to and actually used by the farmer in agricultural operations is exempt from ad valorem general property taxation. Frank J. Kelley Attorney General
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