A marathon session of the State House and Senate ended the 2007-2008 legislative year with a multitude of tax legislation moving quickly through both chambers and to the Governor’s desk.

Beginning the morning of December 18 and adjourning mid-day on December 19, more than 40 individual pieces of tax legislation were passed and offered up to the Governor for signature. Among them is Senate Bill 1038 (supported by MACPA), the omnibus Michigan Business Tax (MBT) legislation. Passed unanimously by both the House and Senate, it reworks the definition of “gross receipts” and “inventory” within the gross receipts tax base. (Read more on these changes on MACPA member Ed Kisscorni’s State and Local Tax blog here.)

Senate Bills 1009 and 1052, representing significant changes to the MBT as related to foreign entities, also passed on this final session day. Senate Bill 1009 exempts “foreign persons” from the MBT, while Senate Bill 1052 amends the definition of a “foreign operating entity” to “include any territory or possession of the U.S. except for the Commonwealth of Puerto Rico.”

A package of House Bills (5554, 5555 and 5556) to amend the Streamlined Sales & Use Tax Administration Act also made its way to the Governor’s desk last month. While it is projected to have little, if any, revenue impact, it will set forth several changes to Michigan state tax statute in order to conform to the multi-state Streamlined Sales & Use Tax Agreement, simplifying collection and administration with the aim to reduce burden on sellers.

In addition to the many tax-related bills passed on the final session day for 2008, the legislature also ushered through House Bill 6633, heavily backed by the Michigan Non-Profit Association. Signed into law by the Governor on New Years’ Eve, it increases the threshold that, once met, requires those charitable organizations that have a state solicitation license to submit to an audit of their financial statements when contributions to the organization exceed $500,000. The threshold for a review of the organization’s financial statements was set to $250,000 (based on the previous year’s 990 return). An automatic increase of $25,000 to both thresholds will take effect every five years beginning in 2015.

The national CPA license mobility initiative continued to make headway through the final months of 2008. Seventeen states enacted mobility provisions during the year, bringing the total to 31 states, including Michigan. To identify those states that have enacted mobility provisions over the past few years, please visit the MACPA’s online License Mobility resource.

Looking ahead to 2009 and the new legislative session, MACPA remains committed to protecting the integrity of the profession by advocating for sound public policy that affects the Michigan CPA. Issues that MACPA will continue to monitor include further changes to the MBT, as well as efforts afoot here in Michigan to create a licensing and regulation structure for paid tax preparers, a proposal that flies in the face of MACPA’s mission to protect both the public and the CPA profession.

As always, members interested in learning more about the topics discussed in this article or getting involved in the policy making process are welcome to contact the MACPA Government Relations Department.

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