LANSING – Provisions in the new Michigan Business Tax that required companies to pay taxes on the amount of sales or other taxes they collected on behalf of the state have now been ended under legislation signed Friday by Governor Jennifer Granholm. The change in the MBT apply retroactively to January 1, 2008.
The change means a long-term loss in state revenues of at least $125 million a year, but Granholm had said it was an inequity that had to be addressed. In the short term, a change in calculating depreciation will mean that state revenues will not be reduced.
The new law eliminates from the definition of gross receipts the taxes that are collected by businesses.
Under other MBT changes retroactive to January 1, 2008, Michigan will provide reciprocal tax treatment to truckers and other businesses operating across the Michigan-Ontario border, clarifying that the definition of gross receipts does not apply to companies that do not have a permanent establishment in the state.
And a third bill clarifies that Puerto Rico is not to be considered a foreign operating entity.
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