|
|
|
          
|
 State Tax Debate Heads into Extra Innings
With the December 31, 2007 expiration of the Single Business Tax looming on
the horizon, policy-makers in Lansing are under increased pressure from
interest groups and the business community to answer questions regarding the
future of Michigan’s business tax structure.
A possible light at the end of the tunnel appears to be the SBT replacement plan released April 25 by the House Democratic Caucus under the leadership of Speaker Andy Dillon (D-Redford Twp.). Rolled out in the form of a substitute for House Bill 4367 (H-1), an analysis of the lengthy legislation is available here. Generally, the plan includes a 6.95% business income (profits) tax; .488 % net worth tax (.318% for financial/insurers/real estate sectors); $700 Million in new credits (R & D, compensation, investment); 1.25% premiums tax on insurers (retaining existing credits); retention of existing $350,000 threshold; 46% personal property tax cut on commercial property; 73% personal property tax cut on industrial property; and a 10% rebate trigger (if revenue comes in more than 10% above estimates, the difference is returned to taxpayers). This plan, developed with the assistance of business groups and tax experts, including CPAs, was greeted with the expected support of those organizations involved in the “workgroups,” such as the Big 3 automakers, the Michigan Manufacturers Association and the Detroit Regional Chamber of Commerce. Additionally, Governor Jennifer Granholm appears to have abandoned her version of the Michigan Business Tax (or MBT – the same name being used by the House Democrats) when she signed-off on the new proposal. The remaining question is the response of the Republican-controlled Senate and other associated constituencies who continue to push the “BEST” plan (an analysis of which is available here). A big lift quickly followed, when the Michigan Chamber of Commerce’s tax committee gave the plan a “thumbs-up” and AT&T made a public statement calling the plan a step in the right direction. The new Michigan Business Tax, as proposed by the House Democratic Caucus, is characterized as incorporating elements of the Governor’s MBT model, the Senate Republican’s “BEST” plan, the Michigan Chamber’s plan, the Grand Rapids Chamber’s plan and others. Many predict this newest proposal may be the catalyst for a compromise between the Governor, House Democrats and Senator Republicans wherein the Senate agrees to this plan for SBT replacement and the House and Administration agree to the Senate’s plan for solving the current budget deficit with spending cuts. The MACPA Legislative Advisory Group, Business Tax Restructuring Task Force, and staff of the Government Relations Department are monitoring the action in Lansing daily to keep MACPA members informed. Top |
 |
  |
|||||||||||||||
|
| PO Box 5068 Troy, MI 48007-5068 Phone: 248.267.3700 Fax: 248.267.3737 E-mail: macpa@michcpa.org | |
