LANSING – In a move to jumpstart Michigan's economy and reward businesses that create jobs here in Michigan, House leadership today unveiled a comprehensive business tax and incentive package that rewards investment, protects Michigan-based companies, and ensures funding for education, health care and the 21st Century Jobs Fund.
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.
"Difficult times require bold solutions, not nibbling around the edges or half-measures," House Speaker Andy Dillon (D-Redford Twp.) said. "This plan is a comprehensive approach to jumpstarting Michigan's struggling economy and rewarding companies that invest here as opposed to those that create jobs in other states and countries. We must act now."
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 for 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.
"Replacing the Single Business Tax in a way that creates the good-paying jobs of the future is critical to moving Michigan forward," said State Representative Paul Condino (D-Southfield). "The House Democrats' plan offers a comprehensive solution that protects health care and public safety while also stimulating job creation. This is the right way to get Michigan moving in the right direction."
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.
"This plan shows that if you create good-paying jobs for our workers and invest in Michigan, you will be rewarded," said State Representative Steve Bieda (D-Warren). "The House's solution to replacing the Single Business Tax will entice emerging industries and 21st century jobs providers to locate in Michigan. Vital services such as health care, public safety and job creation are protected under our plan."