LANSING – In a move to jumpstart Michigan's economy and reward businesses that create jobs here in Michigan, State Representatives Richard Hammel (D-Mt. Morris Township) on Thursday praised the passage of a comprehensive business tax and incentive package that rewards investment, protects Michigan-based companies, and protects funding for education, health care, and police and fire protection. The House passed the plan and it now goes to the Senate.
"This plan will jumpstart our state's economy while protecting money that our local governments rely on to provide vital services to our residents," Hammel said. "To turn Michigan into a thriving place for businesses, we have to reward companies that provide good-paying jobs. At the same time, we must not neglect our local communities' needs. The Democratic plan that I support offers the right solutions and addresses the right priorities. It's a huge step forward."
Under the Michigan Business Tax (MBT), about 75 percent of businesses in Michigan would pay less in taxes. It is the only plan of its kind to address both the Personal Property Tax and the Single Business Tax (SBT) in such a far-reaching manner.
The House's solution for replacing the SBT and reforming the Personal Property Tax will:
- Provide $700 million in new tax credits that reward Michigan businesses for investment, compensation, and research and development.
- Reward capital investment by cutting the Personal Property Tax by an average of
73 percent for manufacturers and 46 percent for commercial businesses, while also protecting funding for local units of government. - Boost job creation by providing credits for investment in Michigan and Michigan payroll.
- Help small businesses by exempting companies with less than $350,000 in gross receipts from taxation. Businesses with up to $700,000 in gross receipts will pay reduced rates. The plan also enhances existing small-business tax credits.
- Protect education, health care, police and fire protection, and other essential services by ensuring revenue-neutrality.
- Benefit most businesses by creating a 0.488 percent tax on net worth and a 7 percent tax on profits.
- Offer a rebate to business taxpayers if the tax generates 10 percent beyond the revenue-neutral point.
In developing the tax reform legislation, House lawmakers consulted with a variety of leaders from the public and private sectors, including tax experts, small business leaders, local government, the nonprofit community, organized labor and many others. The result is a comprehensive package that incorporates elements from the plans offered by Governor Jennifer M. Granholm, the State Senate, the Michigan Chamber of Commerce, the Grand Rapids Chamber of Commerce and others.