LANSING – A personal property tax credit and changes in the single business tax apportionment are expected to be part of the long-awaited Granholm administration proposal to restructure business taxes scheduled to be unveiled Thursday.

Department of Treasury officials were involved in discussions Monday on the proposal with business executives, a number of sources said, and some legislators were expected to be briefed on Wednesday.

As they have all through this process, details on what the plan might entail are being closely guarded.

Sources, who only spoke on condition of anonymity, said the tax changes are aimed at helping companies headquartered in Michigan with large capital investments in the state. The proposal will be revenue-neutral, but sources could not say how much money would be shifted in the tax changes.

One of the biggest changes the proposal will make is a credit for businesses, based on the personal property taxes they pay. The credit is arranged so local government revenues would not be affected.

In addition, the apportionment used by the SBT that allocates the tax on the basis of 95 percent of a company’s sales, 5 percent on property and 5 percent on payroll, sources said, would be converted to basing the tax 100 percent on sales.

One source said an SBT rate cut also is expected to be part of the proposal, although by how much and under what conditions the cut would be made the source did not yet know.

To help pay for the changes and keep them revenue-neutral, there would be changes in the tax’s calculations, including eliminating the excess compensation reduction now allowed.

Rising had launched the intensive review of Michigan’s business tax structure in late 2003. While some consideration had been given to replacing the value-added principles of Michigan’s Single Business Tax, later information indicated officials would seek to modify the tax. Granholm had said in June that, although the SBT is lousy, her goal was to retool it. The proposal also is expected to deal with personal property taxes.

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