LANSING – House Republicans are making preparations to vote next week on their own plan to cut business taxes although they have not broken off negotiations with the Senate and Democratic Gov. Jennifer Granholm.

A House Republican source, speaking on condition of anonymity, said the talks between the Granholm administration and the Legislature have stalled, Gongwer News Service reported. This source, confirming buzz circulating around Lansing, said negotiations will continue – the next meeting is scheduled for Friday – but House Republicans need to move forward to approve their own plan at the August 31 House session.

House Speaker Craig DeRoche (R-Novi) previously has said the House would vote on a business tax plan before Labor Day, whether it is one written by House Republicans alone or one negotiated between the House GOP, Granholm and the Senate.

The House Republican source said the House GOP is revising the plan it announced in June. The new plan was circulated at a private House Republican caucus meeting Wednesday. It contains a bigger net reduction in revenue than the June plan, which would have reduced business taxes by about $320 million annually over five years and had a net revenue reduction of about $95 million annually over the same period.

At this point, the new plan would contain a bigger cut in the Single Business Tax rate than the original bill’s language, reducing the rate from 1.9 percent to 1.7 percent if revenues rise. In exchange for a sharper rate cut, the original plan’s proposal to give to all non-manufacturers except utilities a credit on their Single Business Tax equal to 10 percent of their personal property tax burden would be dropped.

The biggest tax cut in the original plan, a credit for manufacturers on their Single Business Tax equal to 25 percent of their personal property tax burden, would be reconfigured under the new proposal.

However, the source stressed that all proposals were subject to change.

The House Tax Policy Committee is scheduled to meet Thursday on bills that would eliminate some tax exemptions. Part of the original House GOP plan was to close $100 million in exemptions – measures the caucus has yet to identify – to offset the revenue lost from the tax cuts.

DeRoche spokesperson Matt Resch said insufficient progress in negotiations necessitates House Republicans preparing to move on their own plan at the August 31 session.

Resch disputed chatter emanating from some quarters that the House Republicans had broken off talks and had made the decision to pursue their own plan. “There are probably some who wish we would walk away from the table and make it easier for things not to be done,” he said.

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