LANSING – Michigan's business community won a tremendous victory today when State Representatives Barb Byrum (D-Onondaga), Mark Meadows (D-East Lansing) and Joan Bauer (D-Lansing) voted to approve a comprehensive new business tax that rewards investment, protects Michigan-based companies, and safeguards funding for education, health care, and police and fire protection. The new Michigan Business Tax (MBT) replaces the outdated Single Business Tax, which expires at the end of the year.
"The Michigan Business Tax is key to moving our economy forward," Meadows said. "This comprehensive plan rewards companies that create good-paying jobs for Michigan's workers and will help jumpstart our economy."
"This is the first plan of its kind to tackle both replacing the Single Business Tax and slashing the Personal Property Tax," Byrum said. "The MBT will act as an incentive to businesses to locate here in Michigan, which will help get our economy moving in the right direction."
Under the plan crafted by House Democrats, Governor Jennifer M. Granholm and Senate leaders, about 75 percent of businesses in Michigan will pay less in taxes. The MBT 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 MBT will:
- Provide over $600 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
65 percent for manufacturers and 23 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 $20 million 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.
Members of the Michigan's business community have praised House Democrats for showing leadership and vision in the development of the MBT. While 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.
"We worked closely with Michigan's business community to craft a comprehensive plan that truly will move Michigan forward," Bauer said. "By rewarding companies that create good-paying jobs, we can attract more businesses and industries to our state. The MBT is a victory for our businesses and our state."