LANSING – Michigan's business community won a tremendous victory today when the Michigan House approved a comprehensive new business tax that rewards investment, protects Michigan-based companies and safeguards funding for education, health care, and police and fire protection. The new Michigan Business Tax (MBT) replaces the outdated Single Business Tax, which expires at the end of the year.
"The Michigan Business Tax replaces the Single Business Tax in a way that will create the good-paying jobs of the future and move Michigan forward," said State Representative Paul Condino
(D-Southfield), Vice Chair of the House Tax Policy Committee. "The House Democrats' plan says that if you invest in Michigan, you will be rewarded."
Under the plan crafted by House Democrats, Governor Jennifer M. Granholm and Senate leaders, about 75 percent of businesses in Michigan will pay less in taxes.
"Under the Michigan Business Tax, about 75 percent of businesses will pay less in taxes," said State Representative Aldo Vagnozzi (D-Farmington/Farmington Hills). "By having a plan that rewards companies that choose to invest in Michigan, the state will attract emerging industries that are necessary to jumpstart our economy."
The MBT 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.
"Michigan has some of the hardest working people in the country, and the MBT will bring new businesses to our state while rewarding those who already support the state's economy," said State Representative Andy Meisner (D-Ferndale). "Replacing the Single Business Tax with a more equitable solution that rewards investment and protects Michigan-based companies is vital to getting our state back on track."
The MBT 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
65 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; and
- Protect education, health care, police and fire protection and other essential services by ensuring revenue-neutrality.
"In order for Michigan to become a leader in the 21st century global economy, it is critical for the state to secure funding for essential services, including education, health care, police and fire protection, and other vital programs," said State Representative Tim Melton (D-Pontiac). "The business climate in Michigan sets the stage for the entire state's economy, and the MBT will help jumpstart our economy and get Michigan headed in the right direction."
Members of the Michigan's business community have praised House Democrats for showing leadership and vision in the development of the MBT. While developing the tax reform legislation, House lawmakers consulted with a variety of leaders from the public and private sectors, including tax experts, small business leaders, local government, the nonprofit community, organized labor and many others.
"The Michigan Business Tax is a comprehensive solution that will protect our residents, give our businesses a much-needed boost and help stimulate our economy," said State Representative Marie Donigan (D-Royal Oak). "This plan brings Michigan's business tax system into the 21st Century. It's the right plan to get Michigan back on track."