Introduced
by
To reduce the Single Business Tax rate from 1.9 percent to 1.7 percent by 2008; base the apportionment formula under which SBT is levied on firms with business inside and outside Michigan 100 percent on sales by 2008, eliminating property and payroll factors in the formula (see House Bill 4973 for details); phase out the SBT that businesses pay on their employee health insurance costs; reduce the alternative SBT tax rate charged to small businesses from 2 percent to 1 percent by 2010; and authorize an SBT credit equal to 25 percent of the personal property taxes paid by industrial businesses to the state and local government, and 10 percent for commercial businesses. A 50 percent personal property tax credit would be allowed for new property only for two years. This is part of a package with proposals eliminating various tax credits and exemptions, and a proposal to establish a special fund using money gained by the sale or “securitization” of a portion of the revenue stream from the 1998 tobacco company lawsuit settlement. The net business tax cut is projected to be around $300 million per year by 2010.
Referred to the Committee on Tax Policy
Reported without amendment
With the recommendation that the substitute (H-1) be adopted and that the bill then pass.
Substitute offered
To replace the previous version of the bill with one that contains various changes resulting from ongoing negotiations over this tax cut package. See House-passed bill for details. The Sheen substitute contains the final version.
The substitute failed by voice vote
Substitute offered
by
To replace the previous version of the bill with one that contains various changes resulting from ongoing negotiations over this tax cut package. Among other things, the SBT personal property tax credit and apportionment provisions are now in House Bills 4972 and 4973, respectively.
The substitute passed by voice vote
Amendment offered
by
To only allow the tax cut to take effect if the balance in the Budget Stabilization Fund (BSF, or “rainy day fund”) exceeds $250 million, which it has not since <a href="http://www.michiganvotes.org/2002-HB-5883"> House Bill 5883</a> was passed in 2002.
The amendment failed 51 to 56 (details)
Passed in the House 57 to 50 (details)
To reduce the Single Business Tax rate from 1.9 percent to 1.7 percent by 2008; phase out the SBT that businesses pay on their employee health insurance costs; reduce the alternative SBT tax rate charged to small businesses from 2 percent to 1.4 percent by 2010; and make more restrictive the thresholds that allow a firm to use the alternative gross receipts tax calculation method, or to claim an "excess compensation" SBT credit. The bill is part of a tax revision package that trades off tax cuts with certain increased tax levies and other measures to create a net business tax cut of around $300 million per year by 2010.
Referred to the Committee on Finance
Substitute offered
To replace the previous version of the bill with one that does not reduce the Single Business Tax rate from 1.9 percent to 1.7 percent by 2008, but instead uses this bill as a "vehicle" for portions of a smaller business tax cut proposal offered by Senate Majority Leader Ken Sikkema. The legislative package would lower the Single Business Tax rate from 1.9 percent to 1.84 percent (see <a href="http://www.michiganvotes.org/2005-SB-633">Senate Bill 633</a>), lower the “alternative” tax rate for small businesses from 2.0 percent to 1.7 percent, authorize an SBT credit against the personal property taxes paid by industrial businesses, reduce or eliminate various tax credits and deductions, and revise other details of this complex value added tax. Further tax cuts would be contingent on state tax revenues rising faster than the rate of inflation plus one-percent plus $50 million. State spending increases would be limited to the same amount, except that this spending limit could be waived by a simple majority vote in the House and Senate. Over six years, the net tax relief would be $483 million. The package is comprised of Senate Bills 633 and 634, and House Bills 4972, 4980, 5106, 5107, 5108, 5095, 5096, 5097 and 5098.
The substitute passed by voice vote
Passed in the Senate 21 to 16 (details)
To reduce the alternative Single Business Tax rate charged to small businesses from 2 percent to 1.7 percent, and make other SBT cuts contingent on a "trigger" of state tax revenues rising faster than the rate of inflation plus one-percent plus $50 million. One of the "triggered" tax cuts would be a phase out the SBT that businesses pay on their employee health insurance costs. This now becomes part of a smaller business tax cut proposal offered by Senate Majority Leader Ken Sikkema, including <a href="http://www.michiganvotes.org/2005-SB-633">Senate Bill 633</a>, which would cut the regular SBT rate from 1.9 percent to 1.84 percent.
Substitute offered
by
To replace the previous version of the bill with one that reflects the agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt modest business tax cuts and a scaled-down "21st Century Jobs Fund." See House-passed version for details.
The substitute passed by voice vote
Amendment offered
by
To not link the bill to Senate Bill 634, which would eliminate the weighting or apportionment of in-state payroll and property in the formula used to calculate a firm's Single Business Tax liability, and base the liability 100 percent on sales.
The amendment passed by voice vote
Passed in the House 105 to 0 (details)
To reduce the alternative SBT tax rate charged to small businesses from 2 percent to 1.9 percent. Also, to provide a temporary nonrefundable SBT credit against the property taxes paid on industrial tools and equipment brought into Michigan they are used directly by workers transferred here from other states or countries. The bill is part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt <a href="http://www.michiganvotes.org/RollCall.aspx?ID=176636">modest business tax cuts</a> and a scaled-down “<a href="http://www.michiganvotes.org/2005-HB-5047">21st Century Jobs Fund</a>." Full details of the deal are described by a Senate Fiscal Agency <a href="http://senate.michigan.gov/sfa/Publications/BudUpdates/EconDevProposal2005.pdf">analysis</a> <i>(pdf)</i>.
Amendment offered
by
To clarify references in the bill to other statutes.
The amendment passed by voice vote
Passed in the Senate 38 to 0 (details)
To reduce the alternative SBT tax rate charged to small businesses from 2 percent to 1.9 percent. Also, to provide a temporary nonrefundable SBT credit against the property taxes paid on industrial tools and equipment brought into Michigan they are used directly by workers transferred here from other states or countries. The bill is part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt <a href="http://www.michiganvotes.org/RollCall.aspx?ID=176636">modest business tax cuts</a> and a scaled-down “<a href="http://www.michiganvotes.org/2005-HB-5047">21st Century Jobs Fund</a>." Full details of the deal are described by a Senate Fiscal Agency <a href="http://senate.michigan.gov/sfa/Publications/BudUpdates/EconDevProposal2005.pdf">analysis</a> <i>(pdf)</i>.
To concur with a minor change in the Senate-passed version of the bill.
Passed in the House 105 to 0 (details)
Except that the bill will NOT go into effect, because it and other tax cut bills were tie-barred to bills that were vetoed, meaning none can become law unless they all do. However, <a href="http://www.michiganvotes.org/2005-HB-5047">bills</a> creating a new business subsidy program WILL go into law, because their tie-bar language was reportedly drafted incorrectly.
