LANSING ? Michigan Senate Republicans for now are easing away from their business tax proposal to phase out the Single Business Tax, sources said on Wednesday. While no one will declare the SBT phaseout dead, sources acknowledged that the administration/legislative tax workgroup will probably develop another plan to cut business taxes.
The Senate GOP had embraced – and then left in limbo – a proposal that would have phased out the Single Business Tax over two decades with the rollback beginning in 2007. That approach sharply contrasted with those of Granholm, House Republicans and Democrats in both legislative chambers – all of whom advocated immediate business tax relief in some form, largely by easing the burden of the personal property tax.
Senate Republicans did offer a proposal that Ms. Granholm and the House also urged: making the Single Business Tax apportionment formula based entirely on sales, eliminating current factors that include property and wages.
A source familiar with the Senate Republicans’ thinking on the issue, speaking on condition of anonymity, said the Senate GOP – while not flatly declaring its 19-year phaseout of the SBT dead – is moving now toward a business tax cut plan that could be more in line with those of the House and governor. As part of that, Senate Republicans are examining a proposal that would ease businesses’ personal property tax burden.
A workgroup involving the Granholm administration and key legislators from both parties and both legislative chambers continues to seek a compromise on the business tax issue. Granholm and the House, although with slightly different proposals, have recommended giving businesses a credit toward their SBT based on a percentage of the personal property taxes they pay.
Sen. Nancy Cassis (R-Novi), chair of the Senate Finance Committee and a workgroup participant, said, when asked if Senate Republicans were moving away from the plan to phase out the SBT, said, “From my standpoint, (the Senate phaseout) is absolutely in the mix.” Cassis said whatever plan is adopted has to help make Michigan more economically competitive, and ending the SBT would do that.
But she also said that whatever plan emerges from the workgroup will be “the plan. There won’t be a Senate plan. There won’t be a House plan. There won’t be a governor’s plan.”
Rep. Paul Condino (D-Southfield), a workgroup participant, said of the changes he has seen from the Senate on the business tax issue, “Maybe there’s more consensus with the Senate than there had been before.”
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