Fighting for tax reform: the chamber's tax committee works towards a tax structure that is conducive to the Detroit region's economic growth and recovery.I've continued to greatly enjoy my service to the chamber as the chair of tax committee during the past year. After the intense level of activity leading to the enactment of the Michigan Business Tax (MBT MBT Minimum (Spark Advance For) Best Torque MBT Masai Barefoot Technology MBT Main Battle Tank MBT Mechanical Biological Treatment (waste treatment) MBT Mercaptobenzothiazole MBT Master of Business Taxation ) in July of 2007, and the subsequent flurry Flurry A drastic volume increase in a specific security. of activity regarding the service tax and surcharge An overcharge or additional cost. A surcharge is an added liability imposed on something that is already due, such as a tax on tax. It also refers to the penalty a court can impose on a fiduciary for breaching a duty. that resulted in late 2007, our committee continued to be busy throughout 2008 examining the issues arising from the implementation of the MBT. The Tax Committee had two primary areas of focus during the past year, the first being serving as the driver of the process of developing technical corrections technical correction A temporary downturn in the price of a stock or in the market itself following a period of extensive price increases. A technical correction takes place in a generally increasing market when there is no particular reason that the to the MBT, and the second being participating in discussions regarding more fundamental business tax reforms that the legislature has been examining as it continues to work on the 2009-1010 budget. [ILLUSTRATION OMITTED] The committee was significantly involved in the working group process that led to a variety of technical corrections to the MBT. While far from perfect, there was significant progress made in addressing some of the most significant problems with the gross receipts tax A gross receipts tax, sometimes referred to as a gross excise tax, is a tax on the total gross revenues of a company, regardless of their source. It is similar to a sales tax, but it is levied on the seller of goods or services rather than the consumer. base of the MBT. On the front of more fundamental tax reform, the committee has taken the position that further revisions to the MBT are critical, including reversing the effects of the surcharge and enhancing the benefits to in-state business inherent in various features of the tax, but that outright repeal The Annulment or abrogation of a previously existing statute by the enactment of a later law that revokes the former law. The revocation of the law can either be done through an express repeal of the MBT is not prudent given the massive uncertainty which would result from another major business tax overhaul. These discussions are continuing as the state continues to grapple with to enter into contest with, resolutely and courageously. See also: Grapple the need to balance the budget while maintaining a tax structure that is conducive con·du·cive adj. Tending to cause or bring about; contributive: working conditions not conducive to productivity. See Synonyms at favorable. to the Detroit region's economic growth and recovery. Technical corrections The central focus of technical corrections to the MBT during the past year was Senate Bill 1038. This bill became the vehicle for revisions to the definition of "gross receipts the total of the receipts, before they are diminished by any deduction, as for expenses; - distinguished from net profits. - Bouvier. See under Gross, a. os> See also: Gross Receipt " for purposes of the modified gross receipts base of the MBT. Several members of our tax committee played active roles in the work group formed to refine the definition of gross receipts, including myself, members Kelli Murphy and Chuck Wright, Committee Liaison Brad Williams
Brad Andrew Williams (born 20 November 1974 in Frankston, Victoria) is an Australian cricketer. , and chamber Vice President of Government Relations Sarah Hubbard. The bill that ultimately passed on December 19, 2008 during the waning hours of the 2008 legislative session was far from perfect, since it provides for a phase-in of a number of changes which the committee felt were never intended to be subject to taxation, but it is very possible that nothing would have been enacted if not for the efforts of our committee. The chamber's status as a credible voice in the eyes of the legislature was critical to the passage of these technical corrections. Business tax reform debate The speaker of the house expressed significant interest in exploring a tax overhaul in 2009 that would encompass Michigan's entire tax structure, and we have been actively involved in those discussions. A study performed by Detroit Renaissance has generated significant discussion regarding the merits of a revised service tax on business-to-consumer services, a graduated income tax, a reconsideration re·con·sid·er v. re·con·sid·ered, re·con·sid·er·ing, re·con·sid·ers v.tr. 1. To consider again, especially with intent to alter or modify a previous decision. 2. of various tax credits and incentives, and the potential repeal of the MBT surcharge. We have expressed caution regarding revisiting the difficult topic of a service tax and considering the abandonment of our flat rate income tax, which remains one of the few competitive features of Michigan's tax system. However, we have strongly supported consideration of the repeal of the MBT surcharge and restoration or expansion of the various broad-based credits which help mitigate the effect of the MBT on instate in·state tr.v. in·stat·ed, in·stat·ing, in·states To establish in office; install. businesses. Committee focus for 2009-2010 We intend to remain actively involved in the tax reform debate in the coming year, as well as to continue to push for further technical corrections to improve the MBT. In addition, we plan to offer suggestions regarding procedural reforms that can enhance taxpayer rights and improve the fairness and efficiency of Michigan's tax system. Our committee meets regularly and is open to all members to participate, so please consider getting involved in the coming year. Gregory Nowak is the chair of the chamber's Tax Committee and a partner at PricewaterhouseCoopers. Photograph by Kathryn Stevenson |
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