Introduced
by
To adopt a new business tax as a replacement for the Single Business Tax (SBT), which expires at the end of 2007. The new tax would impose levies of 1.875 percent on business profits, .125 percent on gross sales, and .125 percent on a firm’s total assets, very broadly defined. The asset tax would account for 46 percent of the tax revenue, and would apply not just to assets located in Michigan, but all a firm’s assets, multiplied by the proportion of its sales that take place in Michigan. The package would also raise the tax on insurance premiums from 1.07 percent to 2 percent. Combined, these taxes would take approximately $2.5 billion annually from businesses, compared to $1.9 billion the SBT takes. However, the plan would also exempt business tools and equipment (the “personal property tax”) from the 6-mill state education tax and the 18-mill school operating tax. This would save businesses approximately $600 million, which amounts to around one-third of total personal property taxes (firms would still be subject to local personal property taxes.) In the aggregate, the tax changes would be “revenue neutral.” This bill contains the personal property tax exemptions.
Referred to the Committee on Finance
