LANSING – In a move to jumpstart Michigan's economy and reward businesses that create jobs here in Michigan, the Michigan House of Representatives today passed 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.
"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 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 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.
· Three quarters of businesses will see a reduction in their taxes by creating a 0.488 percent tax on net worth and a 6.95 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.