LANSING – House Democrats won a huge victory for Michigan's business community today when the House and the Senate reached an agreement on the Michigan Business Tax, a comprehensive solution to replacing the Single Business Tax that rewards investment, protects Michigan-based companies, and safeguards funding for education, health care, and police and fire protection.
"In order to jumpstart Michigan's economy, we need to reward companies that invest in our state instead of those that outsource jobs to other areas," said State Representative Mike Simpson (D-Liberty Township). "This reform package will pave the way for job creation, which will give Michigan the boost it needs."
Under the agreement reached late Tuesday and solidified today, about 75 percent of businesses in Michigan would pay less in taxes under the Michigan Business Tax (MBT). It is the only plan of its kind to address both the Personal Property Tax and the Single Business Tax (SBT) in such a far-reaching manner.
The House Democrats' MBT plan will:
· Provide over $600 million in new tax credits that reward Michigan businesses for investment, compensation, and research and development.
· Reward capital investment by cutting the Personal Property Tax by
an average of
67 percent for manufacturers and 23 percent for commercial businesses, while also protecting funding
for local units of government.
· Boost job creation by providing credits for investment in Michigan and for Michigan payroll.
· Help small businesses by exempting companies with less than $350,000 in gross receipts from taxation. Businesses with up to $20 million in gross receipts will pay reduced rates. The plan also enhances existing small-business tax credits.
· Protect education, health care, police and fire protection, and other essential services by ensuring revenue-neutrality.
In developing the tax reform legislation, House lawmakers consulted with a variety of leaders from the public and private sectors. The result is a comprehensive package that incorporates elements from the plans offered by Governor Jennifer M. Granholm, the State Senate, the Michigan Chamber of Commerce, the Grand Rapids Chamber of Commerce and others.