LANSING – Changes to the Michigan Business Tax that could cost the state anywhere from $550 million to $850 million this fiscal year passed the Senate on straight party line votes on Thursday.
Supporters said the four bills – SB 1038 , SB 1053 , SB 1054 and SB 1058 – would correct some issues under the tax that would cost businesses, but opponents said the bills were Valentine’s Day gifts to business lobbyists that would force changes in the budget.
All four bills passed on 21-17 votes, Republicans voting in favor of the bills, Democrats voting against.
A Department of Treasury official estimated that changes made to SB 1038 could cost the state $250 million in the current fiscal year by removing several factors – sales taxes as well as other items – that companies must include in gross receipts.
Changes made to SB 1058 will delay revenues to the state, meaning the money will eventually come to the treasury but not this year. The estimate of the potential loss to the current fiscal year was between $300 million to $600 million.
Among the changes made to the bill on gross receipts were provisions that would allow a company not to count sales of totally depreciated personal property as part of gross receipts, or for realty firms to not count commissions paid sales persons, or from leasing property considered an integral part of the business.
Sen. Mike Prusi (D-Ishpeming) said the bills represent gifts to business lobbyists. “All the sweethearts out in the lobby got their chocolate, diamonds, furs and their exemption and exclusions,” he said.
If the bills were to pass, then Granholm would have to redo the budget just announced, Prusi said.
But Sen. Nancy Cassis (R-Novi), chair of the Senate Finance Committee, said since the MBT was passed last summer businesses have come to them with concerns about various issues the bills address.
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