MBT Penalty Relief
On March 18, the Michigan House of Representatives unanimously passed House Bill 4496, addressing the issue of penalty relief for underpayment of estimated Michigan Business Tax (MBT) liability. The bill prohibits the assessment of penalties for a tax year ending before December 1, 2009 if the taxpayer paid at least 75 percent of the tax due in the tax year. The measure now travels to the Senate Committee on Finance for consideration.

Prior to MACPA’s support for and development of the amendment to this bill, the original threshold proposed was 85 percent and the measure did not extend to fiscal-year filers. MACPA Legislative Advisory Group and Business Tax Restructuring Task Force members worked with Department of Treasury officials, the bill’s sponsor, and House Tax Policy Committee leadership to develop the version passed by the House.

MBT Surcharge Replacement?
Over the last several weeks, frequent talk in Lansing centered on proposals to repeal and replace the MBT surcharge levied in 2007. Senate Majority Leader Mike Bishop (R-Rochester Hills) recently floated the idea of using part of the $5.69 billion being sent to Michigan as part of the federal economic stimulus package as replacement for lost tax revenue.

However, as recently as this week, Governor Jennifer Granholm floated an idea of her own regarding the repeal of the surcharge. The Governor has essentially struck down Sen. Bishop’s proposal to use federal stimulus dollars to make up any difference in the revenue stream. Her suggestion: a graduated income tax increase to serve as the revenue replacement.

While Senate Republicans have already passed a bill this year that would gradually repeal the surcharge over time, such legislation is not expected to make it far in the House. Furthermore, Senate Republicans have not been forthcoming with any additional legislation that would serve to replace the $600-$700 million that the surcharge is expected to generate.

One thing that both sides of the aisle can agree on is that the MBT surcharge must be repealed. The debate on just how that will happen rages on. As proposals arise and debates move forward, MACPA will continue to keep members apprised of any important developments on this front.

License Mobility
To date, 38 states have passed CPA license mobility legislation, in one form or another. The most recent developments come out of Kansas, Montana and North Dakota where in the last few days, all three states have sent bills to their respective governors for signature. Several more states are working to pass legislation in the coming weeks and months. To stay informed on recent developments, please visit MACPA’s online resource for the nationwide CPA license mobility initiative.