LANSING – Both Republicans and Democrats are taking steps to ensure that beneficiaries and losers under the new Michigan Business Tax appear before a series of hearings on the tax that are slated to begin this week.

While many companies and business groups have raised concerns with how the MBT has increased the required tax of many firms, companies that have not seen increases or actually seen their taxes go down have been largely quiet.

The MBT replaced the Single Business Tax. After more than 30 years as the state’s business tax, the SBT expired last December 31.

The administration of Governor Jennifer Granholm has said that 70 percent of businesses have either seen no increase or a tax cut under the MBT. But in recent weeks a number of businesses have complained that under the new tax their rates have increased by as much as five fold.

A subcommittee of the Senate Finance Committee to review the MBT has been formed under Sen. Mark Jansen (R-Gaines Township). The subcommittee has scheduled five hearings on the MBT around the state, with the first on Thursday in Grand Rapids.

Chuck Hadden, vice president with the Michigan Manufacturers Association, said he had been contacted by both Republicans and Democrats to help make sure executives of companies that had benefited under the tax testified at the hearings.

An official with another organization said that group had been asked as well to help ensure both sides are represented at the hearings.

“They don’t want just a gripe session,” Hadden said.

Clearly, manufacturers and small businesses did the best under the MBT, Hadden said. But many of the complaints about the new tax lack context, he said.

Companies paying more have largely stated their increases in percentage terms, not in dollar amounts. “I don’t know what they were paying before, so I don’t know what they are paying now,” he said.

“A lot of companies were doing things under the SBT to reduce their tax, and they were doing things that were legal, and those things aren’t there any more so I understand their concerns,” Hadden said.

But the MBT was based on what businesses told lawmakers to consider, Hadden said, which meant making it a broad-based tax with a low rate. Companies did not want to be taxed for the number of people they employed, or for conducting research and development along with other issues, so credits were created for those activities.

Thus far the MBT has raised more than $470 million, which fiscal officials have said is about on track with predictions.

An online poll conducted of Michigan Chamber of Commerce members, who volunteered information about their tax situations, said that 77 percent of those who responded said their taxes would be higher under the MBT and most of those responding said the MBT was more complicated than the SBT it replaced.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com

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