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. 6769 September 14, 1993 TAXATION: Personal property tax on water softener tanks leased for residential use Local units of government may require water softener companies to pay personal property tax on water softener tanks they lease for residential use, with or without an option to purchase. Honorable Gary L. Randall State Representative The Capitol Lansing, Michigan You have asked whether local units of government may require water softener companies to pay a personal property tax on water softener tanks they lease for residential use. You note that the tanks are usually leased with an option to purchase. Property taxes levied under the provisions of 1893 PA 206, the General Property Tax Act, MCL 211.1 et seq; MSA 7.1 et seq, are imposed and collected by local units of government. Section 1 of the General Property Tax Act provides "[t]hat all property, real and personal, within the jurisdiction of this state, not expressly exempted, shall be subject to taxation." Thus, unless there is an express statutory exemption covering water softener tanks, the tanks are subject to the General Property Tax Act. Section 13 of the General Property Tax Act provides, in part, that: All tangible personal property, except as provided in section 14, [the exceptions not relevant here] shall be assessed to the owner thereof, if known, in the township in which it is located on tax day. As the water softener companies are the owners of the water softener tanks, at least until they sell them under the purchase option, they are liable for the payment of personal property tax unless the tanks are exempted from the imposition of the tax. Section 9(f) of the General Property Tax Act provides an exemption for property owned and used by a householder. Here, the water softener tanks are owned, not by the residential householder, but rather by the water softener company. Thus, the exemption provided in section 9(f) does not apply. The Legislature has not provided any exemption from the General Property Tax Act for water softener tanks owned by a water softener company which are leased for residential use, with or without an option to purchase. As there is no exemption, the water softener companies, as the owners of the water softener tanks, are liable for the personal property tax on the tanks under the General Property Tax Act. It is my opinion, therefore, that local units of government may require water softener companies to pay a personal property tax on water softener tanks they lease for residential use, with or without an option to purchase. Frank J. Kelley Attorney General