LANSING – Business leaders on Wednesday implored members of the House Tax Committee to pass what they called a technical fix to the Michigan Business Tax that, if left unchecked, could cost state corporations millions.

Meanwhile, Ann Marsden, CEO of the Michigan League for Human Services, said that the proposed change businesses ask for is much more than a “technical fix” and could end up costing the state $1 billion in lost business tax revenue, threatening essential services in process.

“Making an adjustment in a revenue neutral tax is a change that we can ill-afford,” Ms. Marsden said.

The needed fix, explained business leaders, is relief to businesses that have declared deferred assets under the Single Business Tax and would essentially end up being overtaxed on those assets, in an “unintended consequence of the MBT transition.”

Greg Nowak, chair of the Detroit Regional Chamber of Commerce Tax Committee, said that in order for businesses to avoid not only higher taxes, but also potential negative impacts such as lower stock ratings, the Legislature and Governor Jennifer Granholm must pass and sign changes to FAS 109 that offset costs of the overlapping taxes by September 30, the date of third quarter close for many companies.

Committee Chair Steve Bieda (D-Warren) said that he’d work on clarifying just what impact the changes would have on human services so that groups such as Marsden’s could support the changes.

He added that he’d like to get a bill up for a vote within two weeks.

A spokesperson for the Department of Treasury said that the value of potential deferred tax liability for businesses nationally is in the trillions of dollars, a number that is hard to boil down for Michigan.

In any case, when looking at Ohio’s similar business tax situation and how keenly the Michigan business community is aware of this problem, it is clear that there is a significant amount of money at stake in the state.

The department would like to work with legislators and businesses toward the September deadline, the spokesperson told the committee.

The committee also passed SB 53, a bill that allows cities to create a voluntary check off box on its tax forms to raise money for charity or public safety.

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