LANSING – Businesses will get a multimillion-dollar break under the state’s new Michigan Business Tax, though not as much as earlier versions in the first 10 years that it would apply as the Senate took action on HB 5104 Friday. In addition to phasing in over a 10-year period the full benefit of the break allowed for business deductions for their deferred tax liability under the new MBT, the bill delays for two additional years, until 2015, when the tax break would begin.
Sen. Jud Gilbert (R-Algonac) said the changes were a concession to Democrats who expressed concern over the estimated $100 million annual cost of the original bill. He said it is important the bill be sent to the governor before October 1 so companies will be able to show the deduction on their books.
In addition to the costs, Democrats had pulled the bill – referred to as dealing with a FAS 109 issue – into the orbit of the budget negotiations.
The 25-12 vote returned the bill to the House, which did not take an immediate vote.
Under the bill, businesses could take 4 percent of the difference in the changed liabilities for the deferred tax in each year in 2015-2020, 6 percent in 2021-2025, and 10 percent in the five years after that.
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