2012 Senate Bill 1069 / Public Act 401

Cut tax imposed on business tools and equipment

Introduced in the Senate

April 17, 2012

Introduced by Sen. Dave Hildenbrand (R-29)

To eliminate (starting 2015) the so-called “personal property tax” on tools and equipment used by manufacturing firms (including things like assembly lines), starting with new equipment acquired from the start of 2012. The bill would also phase out the tax on existing equipment over a seven-year period beginning in 2015. This is part of a package comprised of Senate Bills 1065 to 1072, which uses tax revenue that now pays for previously-granted “corporate welfare” tax breaks and cash subsidies to reimburse local governments for the proposed reduction in revenue. The “personal property tax” currently costs businesses statewide around $1.2 billion annually, which would eventually be reduced by around $470 million.

Referred to the Committee on Finance

May 2, 2012

Reported without amendment

With the recommendation that the bill pass.

May 10, 2012

Amendment offered by Sen. Dave Hildenbrand (R-29)

To suspend the proposed personal property tax cuts on business tools and equipment if the legislature fails to appropriate the reimbursements of foregone revenue to local governments proposed by Senate Bill 1072.

The amendment passed by voice vote

Amendment offered by Sen. Gretchen Whitmer (D-23)

To tie-bar the bill to Senate Bill 117, meaning this bill cannot become law unless that one does also. SB 117 would require candidates for state offices and high-paid local offices to file personal financial disclosure statements.

The amendment failed 13 to 24 (details)

Amendment offered by Sen. Hoon-Yung Hopgood (D-8)

To tie-bar the bill to Senate Bills 1016 and 1017, meaning this bill cannot become law unless those ones do also. Those bills would create a system for rating selective “corporate welfare” type tax breaks and subsidies given to certain firms or industries.

The amendment failed 12 to 25 (details)

Passed in the Senate 23 to 14 (details)

Received in the House

May 10, 2012

Referred to the Committee on Tax Policy

Dec. 5, 2012

Reported without amendment

With the recommendation that the substitute (H-1) be adopted and that the bill then pass.

Dec. 13, 2012

Substitute offered

The substitute passed by voice vote

Amendment offered by Rep. Phil Cavanagh (D-17)

To reimpose the tax imposed on business tools and equipment if the legislature fails to appropriate replacement revenue to local governments.

The amendment failed by voice vote

Amendment offered by Rep. Vicki Barnett (D-37)

To delay the proposed phase-out of this tax.

The amendment failed by voice vote

Amendment offered by Rep. Jeff Farrington (R-30)

To establish a new date on which the bill will go into effect.

The amendment passed by voice vote

Amendment offered by Rep. Jud Gilbert (R-81)

To classify some specific types of business activity as "industrial," which means larger tax cuts under this legislative package.

The amendment passed by voice vote

Amendment offered by Rep. Jeff Farrington (R-30)

To revise a detail of how the tax cut (which comes in the form of a tax "credit") will be claimed by businesses.

The amendment passed by voice vote

Amendment offered by Rep. Jeff Farrington (R-30)

To make the bill's provisions contingent on approval by voters of a measure earmarking a portion to the state use tax to replacing local government revenue foregone by cutting the property tax on business tools and equipment.

The amendment passed by voice vote

Passed in the House 57 to 51 (details)

To gradually eliminate the so-called “personal property tax” levied on tools and equipment used by manufacturing firms (including things like assembly lines. Another bill in this package would reduce (but not eliminate) the amount of this tax extracted from commercial businesses, and others would reimburse the revenue that local governments and school districts now collect from it. This property tax on business tools and equipment currently costs Michigan employers around $1.2 billion annually, which over time would fall to about half that amount.

Received in the Senate

Dec. 14, 2012

Passed in the Senate 25 to 13 (details)

To concur with the House-passed version of the bill.

Signed by Gov. Rick Snyder

Dec. 20, 2012