LANSING – Michigan's business community won a tremendous victory today when the Michigan House approved 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 The new Michigan Business Tax (MBT) replaces the outdated Single Business Tax, which expires at the end of the year.
"Passing the Michigan Business Tax is essential to moving Michigan forward because it rewards investment and protects Michigan-based companies," said State Representative Pam Byrnes (D-Lyndon Township). "This incentive package will help jumpstart our state's economy."
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.