LANSING – New business startups, including those involved in technology, could afford more workers and reinvest in their companies under legislation that passed the Michigan Senate Thursday giving fledgling enterprises a break in their state Single Business Tax bill.
“New business growth will fuel Michigan’s economic recovery and startups need all the help we can give them to succeed,” said Senate Majority Leader Ken Sikkema (R-Wyoming). “This package is just another example of how the Legislature is lowering the barriers businesses face and illustrates our bi-partisan commitment to turning around Michigan’s sluggish economy. I urge Governor Granholm to join the Legislature in its efforts to grow the economy and sign this legislation into law.”
The bi-partisan, bi-cameral package is the latest portion of the Legislature’s JOBS Action Plan for revitalizing Michigan’s economy. It is the ninth component of the 18-point JOBS Action Plan the Republican-controlled Legislature has sent to the governor for her signature since the program was announced last fall.
The bills are designed to encourage the growth of small firms that have the highest potential of creating future jobs and economic growth for Michigan. They would exempt certain businesses from most taxes during their first five years of business traditionally the toughest years for businesses.
Businesses that qualify would be exempt from property taxes, state and city income tax, as well as the SBT for five years if the firm has no net income. Qualified firms are still subject to sales and use taxes.
The Small Business Association of Michigan welcomed Senate approval and urged the governor to promptly sign the measures into law.
“This legislation will do a great deal to help put Michigan in position to capitalize on our competitive advantages: the innate entrepreneurialism, innovation and creativity of our state’s small business community,” said SBAM Vice President Government Relations Barry Cargill. “It’s crucial that we do all we can to nurture the fast growing small business start-ups, particularly the ones that are devoting research and development toward breakthrough technologies, that will yield big dividends in job growth and economic activity in the state.”
SBAM believes that approval of the legislation is just the first step in what is a long-term campaign to encourage entrepreneurship in Michigan.
“Small businesses are responsible for half of private non-farm output and employment but create almost three-quarters of net new jobs,” he said. “It is imperative that we mold Michigan into the nation’s premier haven for entrepreneurial job growth. That means all branches of state and local governments must work together to implement tax and regulatory policies that promote a culture of economic freedom.
