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 The new Michigan Business Tax (MBT) replaces the outdated Single Business Tax, which expires at the end of the year.
"As we work to turn Michigan's economy around, we must reward companies that show their commitment to our state by investing here," said State Representative Kate Ebli (D-Monroe), the lead sponsor of the bill to slash the Personal Property Tax for businesses. "Cutting the Personal Property Tax rewards businesses that create jobs for our workers, and makes our state a magnet for 21st century job providers."
Under the plan crafted by the Michigan House, Governor Jennifer M. Granholm and Senate leaders, about 75 percent of businesses in Michigan will pay less in taxes. 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.
"The Michigan Business Tax is a comprehensive plan that will help jumpstart our state's economy," said State Representative Kathy Angerer (D-Dundee), who was a key player in the negotiations held between the House and Senate earlier this month. "I'm pleased that I was able to sit down with colleagues from both chambers and both sides of the aisle to find ways to move the package forward. By creating incentives for companies that invest in our state, the Michigan Business Tax will bring good-paying jobs to our workers."
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.
- Protect education, health care, police and fire protection, and other essential services by ensuring revenue-neutrality.
Members of the Michigan's business community have praised the House 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.