Legislation Introduced To Cut Single Business Tax

LANSING ? Gov. Jennifer Granholm Tuesday introduced legislation that calls for reforms of the state’s business tax system, including slight cuts in the Single Business Tax rate, a bane to business.

The Michigan Jobs and Investment Act also seeks to be revenue neutral, avoiding major cuts in the state and local government budgets, Granholm said.

“For too long, Michigan business taxes have picked winners and losers, and manufacturers have been paying a disproportionate share of the state’s business taxes,” said John MacIlroy, CEO of the Michigan Manufacturers Association. “It’s time to end the discrimination and level the playing field. The governor’s comprehensive plan does that better than any we have seen.”

The legislation also is supported by the Small Business Association of Michigan.

“This legislative proposal addresses many of the tax reform principles that we have endorsed over the years,” said SBAM President Robert Fowler.

The tax plan won the endorsement of the Michigan AFL-CIO as well.

“Our coalition represents the face of Michigan’s workforce,” said Ken Fletcher, AFL-CIO Legislative Director.

Representatives Condino and Meisner, sponsors of the House bills, call the Michigan Jobs and Investment Act a win for large and small businesses alike.

“Three of every four businesses that currently pay the SBT will see a tax cut,” said Condino. “And, small businesses benefit even more through a 40 percent rate cut.”

Meisner underscored the importance of a restructuring that is revenue neutral with no further negative impacts on Michigan?s state budget.

“This plan makes Michigan?s tax structure competitive but recognizes that we have to protect Michigan?s quality of life, too.”

Key provisions of the Act include:

Cuts the rate for all SBT taxpayers – reduced from 1.9 percent to 1.2 percent (2 percent to 1.2 percent for small business).

Creates a manufacturing personal property tax credit – manufacturers would get a credit for 35 percent of personal property taxes paid on property used for manufacturing or R&D purposes.

Creates an R&D credit – taxpayers would receive a credit for1.2 percent of compensation paid to employees engaged in research and development.