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2011 House Bill 4361: Replace MBT, raise income tax, trim credits

Public Act 38 of 2011

  1. Introduced by Rep. Jud Gilbert (R) on March 1, 2011, to eliminate the “modified gross receipts tax” component of the Michigan Business Tax, and change the rate of the remaining corporate income tax portion to 6 percent. This is what Gov. Rick Snyder has proposed, and would result in a substantial net reduction in state business tax levies.
    • Referred to the House Tax Policy Committee on March 1, 2011.
      • Reported in the House on April 27, 2011, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
    • Substitute offered in the House on April 27, 2011, to adopt a version of the bill that incorporates all of Gov. Rick Snyder's income and business tax proposals. For complete details see House Fiscal Agency analysis. The substitute passed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Jud Gilbert (R) on April 27, 2011, to revise various definitions that affect details of certain business and personal income tax deductions and credits. The amendment passed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Mark Meadows (D) on April 27, 2011, to not reduce the current pension exemption in the personal income tax. Under the bill, goverment employee pension income for taxpayers born before 1946 would still be fully exempt, and for others, pension income below $45,120 would be exempt. Those born between 1946 and 1952 would have a partial exemption, and those born later no exemption until age 67, when they would get a limited exemption. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Phil Cavanagh (D) on April 27, 2011, to retain the state Earned Income Tax Credit (EITC), rather than replacing it with a $25 per child payment to low income parents. The EITC is a refundable tax credit (or “reverse income tax”) that sends checks to low income workers. Under it, more than $300 million worth of Michigan tax revenue is redistributed annually to workers who have low incomes. The amendment failed 48 to 59 in the House on April 27, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Rep. Bob Constan (D) on April 27, 2011, to not repeal an income tax credit for donations to municipal art projects, public broadcasting stations, libraries, universities, etc. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Rudy Hobbs (D) on April 27, 2011, to not repeal an income tax credit for donations to homeless shelters, food banks and similar institutions. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Jim Townsend (D) on April 27, 2011, to not repeal certain corporate subsidies and tax breaks for developers who rehab or redevelop certain “brownfield” properties. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Jim Townsend (D) on April 27, 2011, to not repeal certain corporate subsidies and tax breaks for developers who rehab or redevelop certain “brownfield” properties. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Jim Townsend (D) on April 27, 2011, to not repeal certain corporate subsidies and tax breaks for developers who rehab or redevelop certain “brownfield” properties. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Rudy Hobbs (D) on April 27, 2011, to not repeal certain corporate subsidies and tax breaks for developers who rehab or redevelop certain “historic resource” properties. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Vicki Barnett (D) on April 27, 2011, to revise the definition of “household resources” in a way that would raise the income cap on eligibility for certain personal income tax credits. The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Lisa Brown (D) on April 27, 2011, to earmark to the School Aid Fund an amount of revenue from the new corporate income tax that is equal to the amount distributed to the SAF by the Michigan Business Tax (which collected much more total revenue than the new tax). The amendment failed by voice vote in the House on April 27, 2011.
    • Amendment offered by Rep. Shanelle Jackson (D) on April 27, 2011, to not repeal the unlimited state subsidy for film producers. The amendment failed by voice vote in the House on April 27, 2011.
  2. Passed 56 to 53 in the House on April 28, 2011, to replace the Michigan Business Tax with a 6 percent corporate income tax; eliminate several corporate tax breaks and subsidies; repeal a gradual cut in the personal income rate from 4.25 percent to 3.95 percent; scale-back the current income tax exemption for pension income; replace the Earned Income Tax credit with a $25 per child payment to low income parents eliminate or reduce other income tax deductions and credits including the homestead property tax credit, personal exemption and dependent child credit; and make many other tax code revisions. For details see House Fiscal Agency analysis.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on May 4, 2011.
    • Referred to the Senate Reforms, Restructuring and Reinventing Committee on May 4, 2011.
      • Reported in the Senate on May 12, 2011, with the recommendation that the bill pass.
    • Substitute offered in the Senate on May 12, 2011, to adopt a version of the bill that cuts but does not eliminate the Earned Income Tax Credit, and which allows the recipients of some corporate subsidies granted in the form of "assignable" tax credits to "sell" these back to the state for 90 cents on the dollar. The substitute passed by voice vote in the Senate on May 12, 2011.
    • Amendment offered by Sen. Steve Bieda (D) on May 12, 2011, to tie-bar the bill to Senate Bill 117, meaning this bill cannot become law unless that one does also does. SB 117 would require elected state officials to file personal financial disclosure statements. The amendment failed 13 to 25 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Coleman Young (D) on May 12, 2011, to leave in place the current income tax exemption on all income from government pensions and some income from private sector pensions. The amendment failed 19 to 18 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Steve Bieda (D) on May 12, 2011, to leave in place for persons age 67 and above the current income tax exemption on all income from government pensions and some income from private sector pensions. The amendment failed 16 to 21 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Moved to reconsider by Sen. Tupac Hunter (D) on May 12, 2011, the vote stripping out repeal of the income tax pension exemption. The motion failed 14 to 24 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. John Gleason (D) on May 12, 2011, to not repeal a $1,800 tax exemption for individuals who have a dependent age 65 or above living in the household. The amendment failed 16 to 22 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Steve Bieda (D) on May 12, 2011, to not repeal a certain income tax deduction for dividend, interest and capital gain income earned by senior citizens. The amendment failed 16 to 22 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Rebekah Warren (D) on May 12, 2011, to strip out a provision that cuts the Earned Income Tax Credit by 70 percent. The amendment failed 14 to 24 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Virgil Smith, Jr. (D) on May 12, 2011, to strip out a provision that cuts the Earned Income Tax Credit by 70 percent. The amendment failed 14 to 24 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Rebekah Warren (D) on May 12, 2011, to not repeal the income deduction for certain charitable donations. The amendment failed 18 to 20 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Gretchen Whitmer (D) on May 12, 2011, to not repeal an income tax deduction for IRA money withdrawn and used for certain college expenses. The amendment failed 17 to 21 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Morris Hood, III (D) on May 12, 2011, to not repeal an income tax exemption for certain unemployment insurance benefit income. The amendment failed 16 to 22 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Gretchen Whitmer (D) on May 12, 2011, to not repeal a certain income tax deduction for child care expenses. The amendment failed 18 to 20 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Rebekah Warren (D) on May 12, 2011, to repeal certain corporate tax breaks for money invested in certain businesses approved by state economic development officials. The amendment failed 13 to 25 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Tupac Hunter (D) on May 12, 2011, to not reduce the homestead property tax credit individuals may claim against their income tax liability. The amendment failed 17 to 21 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Amendment offered by Sen. Glenn Anderson (D) on May 12, 2011, to prospectively repeal a provision exempting from income tax the pension income of government employees, if a court rules that this violates the constitution. The amendment failed 17 to 21 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

    • Motion by Sen. Tupac Hunter (D) on May 12, 2011, to let stand a parliamentary ruling that Senators who might benefit from certain tax cuts in the bill must decide for themselves whether voting for it would be a conflict of interest. The motion passed 26 to 12 in the Senate on May 12, 2011.
      Who Voted "Yes" and Who Voted "No"

  4. Passed 19 to 19 in the Senate on May 12, 2011, to replace the Michigan Business Tax with a 6 percent corporate income tax; eliminate several corporate tax breaks and subsidies; repeal a gradual cut in the personal income rate from 4.25 percent to 3.95 percent; scale-back the current income tax exemption for pension income; reduce the Earned Income Tax by 70 percent, eliminate or reduce other income tax deductions and credits including the homestead property tax credit, personal exemption and dependent child credit; and make many other tax code revisions.
    Who Voted "Yes" and Who Voted "No"

  5. Motion in the Senate on May 12, 2011, to give the bill immediate effect.
  6. The motion failed 25 to 11 in the Senate on May 12, 2011, to give the bill immediate effect (a two-thirds majority is needed).
    Who Voted "Yes" and Who Voted "No"

  7. Motion by Sen. Arlan Meekhof (R) on May 12, 2011.
  8. The motion passed 26 to 12 in the Senate on May 12, 2011.
    Who Voted "Yes" and Who Voted "No"

  9. Received in the House on May 12, 2011.
  10. Passed 56 to 52 in the House on May 12, 2011, to concur with the Senate-passed version of the bill, which among other things cut rather than eliminated the state Earned Income Tax Credit for low income wage-earners.
    Who Voted "Yes" and Who Voted "No"

  11. Signed by Gov. Rick Snyder on May 25, 2011.

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