michigan business tax

The Michigan State Capitol.
Steve Carmody / Michigan Radio

LANSING, Mich. - Gov. Rick Snyder has signed a bill to clarify that Michigan never intended to give out-of-state companies a lower tax liability in a 2007 business tax overhaul.

The legislation is designed to ensure the state isn't forced to pay $1.1 billion in refunds in 134 cases after a July ruling from the Michigan Supreme Court in a case involving IBM. The administration and lawmakers worried the court's 4-3 decision could affect other cases in the 2008, 2009 and 2010 tax years.

Snyder said in statement Friday that the bill is a "common-sense solution" encouraging companies to invest and create jobs in Michigan. The state estimates most of the $1.1 billion in refunds would have been paid in the fiscal year that starts in October, throwing the budget out of balance.

Steve Carmody / Michigan Radio

Michigan voters will have a chance to drive the final nail into the coffin of the state’s  Personal Property tax this summer. The Board of State Canvassers today designated the PPT question as Proposal 1 on the August 5 ballot. It will be the only statewide question on the ballot.  

Businesses pay the tax based on the value of their equipment and other assets. Many Michigan communities rely on the tax revenues to pay for basic city services.

Steve Carmody / Michigan Radio

LANSING, Mich. (AP) - Michigan Governor Rick Snyder has signed legislation designed to ensure local government budgets aren't hurt if manufacturers and small businesses get planned tax cuts.

A phase-out of taxes on industrial machinery starts in 2016 and is underway for small businesses with equipment. The tax cuts will be halted if a statewide vote fails in August.

Governor Snyder says a new survey shows his efforts to attract more international investment in Michigan is paying off.

The “insourcing” survey cites Michigan for adding more than 250,000 private sector jobs since 2010, and 32,000 from foreign investment in 2011 alone –more than twice as many as any other state.

The survey found that the heads of multinational firms are cautiously bullish about doing business in the U.S., but things could be better.

Steve Carmody / Michigan Radio

LANSING – Michigan lawmakers this week will propose a deal to guarantee that local governments lose little to no revenue from a planned phase-out of taxes on industrial machinery and small businesses' equipment.

The business tax cuts were enacted by Gov. Rick Snyder and legislators at the end of 2012. But they will be halted if a statewide vote fails in August.

An agreement reached among Snyder's administration, business interests and local officials would make sure municipalities opposing a loss in revenue are mostly kept whole.

Steve Carmody/Michigan Radio

Governor Rick Snyder is cool to a proposal to roll back Michigan’s new pension tax.

The pension tax was part of a package enacted in 2011 that eliminated the Michigan Business Tax.

A group of five Republican state senators wants to repeal the pension tax and reinstate some homestead property tax credits.

Governor Snyder says the tax on pensions is just a matter of fairness, so that the tax burden falls equally. The governor insists the tax that pensioners are now paying is not too much ask.

LANSING, Mich. (AP) - Michigan says the new corporate income tax returns it's processing are much shorter in length than other business tax returns.

The state Department of Treasury says the returns submitted to date average 17 pages. That's 41 fewer pages than the average Michigan Business Tax return.

The Corporate Income Tax approved in 2011 took effect for the 2012 tax year. Some businesses still file an MBT return because they qualify for certain tax credits.

The state says some MBT returns are longer than 1,000 pages.

Stateside: Changes to tax refunds may come as a surprise to some

Jan 29, 2013
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The following is a summary of a previously recorded interview. To hear the complete segment, click the audio above.

For those who have not yet completed your 2012 tax returns- brace yourselves.

In 2011 Governor Snyder signed a tax overhaul package that included $1.4 billion  in additional income taxes and $1.7 billion in business tax cuts.

A DDOT bus in Detroit. People have been talking about the need for a regional transit authority for many years.
Sarah Hulett / Michigan Radio

Governor Rick Snyder discussed all kinds of issues during an online townhall meeting today. People participated in the town hall online and remotely from Traverse City, Grand Rapids and Detroit.

“My question is what can be done about the horrible transportation situation in the City of Detroit?” Shelia Foreman asked Snyder from Wayne State University’s TechTown. “I have had relatives lose their jobs because they cannot get to them. Do you have a solution for that?”

user Penywise / morguefile

Nonprofits across Michigan are doing their annual end-of-year holiday push for financial donations. This will be the last time donors will be able to take advantage of a charitable tax credit.

Center on Budget and Policy Priorities

The report was put out by the Center for Budget and Policy Priorities. Its authors write there is "significant room for improvement" in how states tax low-income families. Some of it is inevitable, they write, since states are facing "the most difficult fiscal conditions in decades.":

But a few states have moved significantly backward in this area, raising taxes on low-income working families in order to finance tax cuts that benefit corporations and wealthy individuals.  Michigan, New Jersey, and Wisconsin, for example, have scaled back their EITCs [Earned Income Tax Credits] over the last two years while cutting business taxes, taxes on the wealthiest families, or both.

The Associated Press' Kathy Barks Hoffman wrote about the report. She writes that Michigan's low-income families will lose around $260 million annually next year, while businesses will be getting "a $1.1 billion tax break starting in January and a $1.7 billion tax break the year after":

Michigan Gov. Rick Snyder originally wanted to eliminate the state Earned Income Tax Credit, but agreed to reduce it from 20 percent of the federal credit to 6 percent for tax year 2012. He said earlier this year that the state needed to make cuts to balance the budget and noted no cuts were being made in Medicaid programs providing health care to low-income working families. He also has said the business tax cuts will create employment opportunities.

John Morgan / Flickr

(*Editor's note - Michigan Radio, as a licensee of the University of Michigan, benefits from this tax credit)

The Michigan charitable giving tax credit expires at the end of the year, and charities are expecting the amount people donate to charities to drop as a result.

The charitable giving credit was ended as part of Governor Snyder's effort to pay for a business tax cut of more than $1.5 billion.

The credit allows Michigan taxpayers to essentially double their contribution when they give to community foundations, homeless shelters, food banks and public institutions (such as Michigan universities, museums, public libraries, and public broadcasting stations).

For a single filer, half their contribution can come off their Michigan tax bill up to a $200 contribution. Joint filers can take half of a $400 contribution.

Brian Conner of the Detroit News wrote a piece on the expected effects of the credit's expiration.

Conner writes that charities in Michigan don't quite know how much of their donations are tied to the credit, but the expect to take some kind of a hit.

Lindsey Smith / Michigan Radio

About 500 people in West Michigan spent a couple hours Friday night in Grand Rapids, talking with their state representatives about how to fund public education. 

The forum was rescheduled from last week after a fire marshal shut it down in Lowell (20 miles west of Grand Rapids) because so many people showed up it broke the fire code of the building.

Last night the crowd was  passionate, at times interrupting and booing Republican lawmakers.

Charley Ballard, Michigan State University economist, spoke with Cyndy about the health of Michigan's economy.
Michigan State University

Governor Snyder and the legislature have come to an agreement on the state’s new tax structure. Does it make fiscal sense?

Michigan Radio's Jennifer White spoke with Charles Ballard, an economist at Michigan State University and author of “Michigan’s Economic Future.” Here's the interview.

Russ Climie / Tiberius Images

Governor Rick Snyder is expected to sign the tax overhaul that replaces the business tax with a 6% corporate income tax on profits.

Leaders of the West Michigan Policy Forum touted "the MBT is dead!” in an email to around 600 supporters Friday. Those supporters voted 'eliminating the business tax' as their top priority during the Policy Forum’s first conference in 2008.

Russ Climie / Tiberius Images

Governor Rick Snyder defends his tax overhaul, which has drawn a lot of criticism from the public in recent weeks, saying that he is confident that cutting taxes for Michigan businesses will create jobs. The Legislature approved his tax plan yesterday and it’s on its way to Snyder’s desk for his signature.

Lester Graham / Michigan Radio

Update 5:21 p.m.

Republicans eked out a legislative victory today as Governor Rick Snyder's tax overhaul package cleared the state Senate.

It fell to Snyder’s lieutenant governor to cast the tie-breaking vote.

Lieutenant Governor Brian Calley delivered a short speech before he cast the vote to break the deadlock on the tax reform package he had a hand in designing.

Calley predicted some lawmakers will pay a price for supporting the administration's tax reforms.

"Because real change comes with real consequence," said Calley. "Real change will come with drama."

Seven Republicans joined Democrats to vote against the package, largely because the measure will end the tax exemption on pension income for anyone born after 1946.

Democrats say it will shift the burden of paying for government services to families and the elderly.

State Senator Steve Bieda was one of the Democrats who voted against the measure.

"It’s shifting the tax to those who are least able to pay in our society," said Bieda. "We are talking about the elderly, people who are living on pensions are going to see a huge increase. I think it’s unjust, unwise, and it’s certainly very unfair."

Bieda tried to delay the vote until next week when the state adopts new revenue numbers. It’s expected there will be a windfall of more revenue than was anticipated at the beginning of the year.

The package eliminates the Michigan Business Tax in favor of a corporate profits tax.

It also eliminates a host of tax breaks, including the income tax exemption for people on pensions.

Overall, the package rolls back taxes on businesses by nearly $2 billion. Most of the businesses that would benefit are small and medium-sized corporations.

Republicans say the result will also be a tax code that is simpler and easier to follow.

State Senate Majority Leader Randy Richardville says there are some hard choices in the package, but they combine to make Michigan more business-friendly.

"So we put the good, the bad, the ugly altogether in one package and said, we believe the greater good is worthy of some of the not-so-good or ugly, so to speak."

The Senate bill restores the earned income tax credit for working poor families, but at a reduced rate.

The House is expected to quickly concur with the Senate action and send the measure to Governor Snyder for his signature.

3:55 p.m.

Lieutenant Governor Brian Calley has cast the tie-breaking vote to win Senate approval of Governor Rick Snyder's tax overhaul plan.

The package scraps the Michigan Business Tax in favor of a corporate profits tax.

It will be a net tax cut on many small and mid-sized businesses.

It also eliminates a host of tax breaks, including the income tax exemption for pensions.

Republicans say the result will be a tax code that is simpler and easier to follow and more business-friendly.

user cedarbenddrive / Flickr

Michigan could see some sweeping changes to its tax structure after today's vote.

Michigan's former Senate Majority Leader Mike Bishop sent out this Tweet:

"Here we go ... Senate in caucus now, but will soon emerge to vote on Gov's tax proposal. If it passes, I expect it will be by a vote or 2."

From the Associated Press:

The Republican-led Michigan Senate is preparing for what likely will be a close vote on a proposal that would significantly shake up the state's tax structure.

The vote planned Thursday is on a proposal that would cut overall business taxes by about $1 billion in the fiscal year starting Oct. 1 and $1.7 billion the following year. The key would be replacing the Michigan Business Tax with a 6 percent corporate income tax while eliminating many types of tax credits and exemptions.

Some exemptions on retiree income would end, which has drawn opposition from some Republican lawmakers. Some Republicans also will oppose the measure because it would delay scheduled rollbacks in Michigan's personal income tax rate, which is 4.35 percent.

A committee reported the bill to the Senate floor Thursday.

A Michigan Senate committee isn't yet ready to make a decision on a broad plan that would significantly change business and income tax structures in the state.

The Senate Reforms, Restructuring and Reinventing Committee adjourned Wednesday without a vote on the legislation.

It's still possible the proposal will be voted on in the Republican-led Senate as early as Thursday.

The plan backed by Republican Gov. Rick Snyder would cut overall business taxes about $1 billion in the fiscal year starting Oct. 1 and $1.7 billion the following year. The key would be replacing the
Michigan Business Tax with a 6 percent corporate income tax while eliminating many types of tax credits and exemptions.

Some exemptions on retiree income would end, which has drawn opposition from some Republican lawmakers.

Lester Graham / Michigan Radio

Update 5:14 p.m.

Governor Rick Snyder’s tax overhaul plan began working its way through the Legislature today as it cleared the state House by a mostly party-line vote.

The Republican tax reform bill would replace the complex and unpopular Michigan Business Tax with a corporate profits tax.

Two-thirds of Michigan businesses would not have to pay the tax.

Part of the revenue lost to the state would be made up by eliminating dozens of tax breaks.

Many of them go to businesses and charities. Also gone would be earned income credit for working poor families and the income tax exemption for most seniors on pensions.

“This is a turnaround moment for Michigan,” said Republican House Speaker Jase Bolger. “Today’s winners are our local small business owners. Today’s winners are the unemployed because now those small business owners can create jobs.”

Democrats say it’s not fair to make working families and seniors make up the difference while most businesses pay less. Democratic state Representative Barb Byrum says it's not a fair trade.

“This legislation is not a shared sacrifice and should not be adopted. Today is just another day another day to give an 82% tax break to wealthy, corporate special interests. Another day to take from our children, our seniors, and our working poor."

The measure now goes to the Republican-controlled state Senate.

3:41 p.m.

Governor Rick Snyder’s tax overhaul plan has begun its march through the Legislature.

It won the approval of the state House by a mostly party-line vote.

The measure would scrap the complicated and unpopular Michigan Business Tax.

It would be replaced by a corporate income tax that would not be paid by two-thirds of the state’s businesses.

Part of that lost revenue would be made up by ending many tax breaks for businesses, working poor families, and seniors on pensions.

Lester Graham / Michigan Radio

The Michigan legislature and Governor Rick Snyder are considering a new tax structure for the state.  It would cut the state budget and shift some of the tax burden from businesses to individuals.  The Governor has said up to two-thirds of Michigan’s businesses might not have to file a state tax return at all.  Reporters Lester Graham and Bridget Bodnar with Michigan Watch learned that means some legislators who own businesses could be voting to cut their own taxes.

For some years, I have argued in favor of what has become the ultimate heresy in today’s political world. I think those of us who can afford it should pay more taxes.

No, not so people who are too lazy to work can sit on the couch and watch The Price is Right. Nor am I intent on subsidizing the birth of large numbers of out-of-wedlock children to non-working families, though I’ve been accused of that in less gentle terms.

Rolling the Dice

Apr 18, 2011

We in the media have been paying a lot of attention to Governor Snyder’s attempts to push his program through the legislature. Mostly, we‘ve been preoccupied with the mechanics.

Last week, we talked about his compromise on the pension tax. Soon, we‘ll be discussing what seems likely to be the governor’s  success at cutting spending for the schools. Occasionally, we remember to mention the reason for all this painful budget slashing.

Lester Graham / Michigan Radio

Senate Bill 1 has been introduced, and you can read it, in its entirety - here you go:

The Michigan business tax act, 2007 PA 36, MCL208.1101 to 208.1601, is repealed.

The bill was introduced by Senator Dave Hildenbrand and comes in advance of Governor Rick Snyder's State of the State address tonight.

Replacing the Michigan Business Tax was one of candidate Snyder's main promises to voters.

Laura Weber of the Michigan Public Radio Network filed a report on Senate Bill 1:

Senator Dave Hildenbrand...says his bill is more aggressive than a similar bill introduced by House Republicans, which only repeals part of the business tax:

"Well we wanted to send a strong message that we want to create a better business climate in this state so our job providers can provide jobs. It’s pretty clear, I think to all of us, that the Michigan Business Tax is an obstacle for employers to good create jobs, expand, for the ability for us to attract job providers to Michigan. So we’ve declared war on the Michigan Business Tax."

Governor Rick Snyder wants to replace the Michigan Business Tax with a flat tax on large businesses. Snyder is expected to talk more about his plans for economic development during his State of the State address tonight.

(photo by Steve Carmody/Michigan Radio)

Governor-elect Rick Snyder tells the Associated Press that he plans to give state lawmakers a two-year budget proposal, that he wants them to pass by July 1st.    That would be a big change in two ways: 1) most state budget plans have been year to year, not two year plans, and 2) the legislature rarely passes a state budget until near the end of the fiscal year in September.  Snyder tells the Associated Press he's accelerating the normal budget drafting pace and will be delivering his plan to the legislature earlier than the mid-March deadline.  Snyder says he's making business tax reform a major part of his budget plan, according to the Associated Press:

 As Michigan begins to emerge from its decade-long economic slump, Snyder says his first priority is to eliminate any hurdles to that recovery. He plans to cut business taxes in the budget that takes effect next fall.