LANSING – On a 20-16 straight party-line vote the Michigan Senate has passed a proposal to replace the expanded sales tax on services with a temporary business tax surcharge, but action on HB 5408 leaves open the dispute on resolving the issue before the tax takes effect on December 1.
The Senate changes cuts the surcharge that the House passed from 32.9 percent in the first year to 13.85 percent, and lifts the cap on taxes any one company is required to pay from $2 million to $7.5 million, but also will create a potential tax cut for businesses. The measure also sunsets the surcharge in 2011.
Democrats said the measure puts the state back into a deficit spending mode, but Republicans said it will help job providers.
More details will be provided shortly so check back later.
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