Introduced
by
To resume the gradual phase-out of the Single Business Tax (SBT) that was <a href="http://www.michiganvotes.org/2003-HB-5883">stopped by legislation passed in 2002</a>. Beginning in 2006, the current 1.0 percent SBT rate would be cut by .1 percent each year until it is eliminated.
Referred to the Committee on Finance
Reported without amendment
With the recommendation that the substitute (S-1) be adopted and that the bill then pass.
Substitute offered
To replace the previous version of the bill, and use it as a "vehicle" for a business tax cut proposal offered by Senate Majority Leader Ken Sikkema as an alternative to a <a href="http://www.michiganvotes.org/RollCall.aspx?ID=173410">larger tax cut passed by the House</a>. The complete legislative package would lower the Single Business Tax rate from 1.9 percent to 1.84 percent, 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 4342, 4972, 4980, 5106, 5107, 5108, 5095, 5096, 5097 and 5098.
The substitute passed by voice vote
Passed in the Senate 22 to 16 (details)
To lower the Single Business Tax rate from 1.9 percent to 1.84 percent, 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. This becomes part of a business tax cut proposal offered by Senate Majority Leader Ken Sikkema as an alternative to a <a href="http://www.michiganvotes.org/RollCall.aspx?ID=173410">larger tax cut passed by the House</a>.
Referred to the Committee on Tax Policy
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 complete package includes House Bills 4342, 4972, 5047, 5048, 5095-5098, 5106-5109, and Senate Bills 298, 359, 521, 533 and 633. The tax cut and business subsidy bills are all tie-barred together, meaning they all must become law or none do.
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 104 to 1 (details)
To reduce the Single Business Tax rate from 1.9 percent to 1.85 percent in 2009, and restrict the use of tax-reducing alternative gross receipts tax calculations and "excess compensation" credits. The bill is part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt modest business tax cuts and a scaled-down “<a href="http://www.michiganvotes.org/2005-HB-5047">21st Century Jobs Fund</a>." The package would also lower the SBT that businesses pay on their employee health insurance costs beginning in 2009; reduce the alternative SBT tax rate charged to small businesses from 2 percent to 1.9 percent; provide a refundable SBT credit against a portion of the property taxes paid on industrial tools and equipment; reduce but not eliminate the weighting of in-state payroll and property in calculating a firm's SBT liability; and offset these tax cuts by eliminating a number of existing tax credits and deductions. The net reduction in business tax burden over six years would be $472 million, or approximately two-tenths of one percent of state spending over that period. 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>.
Passed in the Senate 34 to 4 (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.
