What they're saying ... we asked four people--a small business owner, a member of our Board of Directors, a state legislator and a news media representative--to comment on the SBT issue.
Group Managing Partner
Plante & Moran
Board of Directors
Now that the SBT is officially repealed effective for periods after 2007, the Michigan legislature and the Governor's administration should work quickly, but carefully, to design and enact a Michigan business tax system that will encourage new or expanded economic development in the state. Unnecessary delays should be avoided since the uncertainty of a new tax regime may be an even greater hindrance to economic development than the real or perceived hindrance caused by the SBT.
Jennifer Kerr, RN
President and CEO
Care Management Consultants
I agree that the SBT should be replaced, and that businesses currently exempted from the SBT should continue to be exempt at the present level. However, businesses required to pay a tax should be based on some measure of profitability so that businesses that do not make a profit do not have to pay the tax. My hope is that the new Michigan Business Tax Reform Package approved by the lawmakers and supported by Michigan businesses is a tax package that is simple and easily understood by the business community. For example, the Detroit Regional Chamber's recommendation is to eliminate the SBT and replace it with a Business License Tax. The Chamber says it is a form of a gross receipts tax, which is similar to the proposed plan presented by the Michigan Chamber of Commerce and the Grand Rapids Chamber of Commerce. If this is the case, why not use the same terminology, so it won't be viewed as a modified version of the current SBT?
Crain's Detroit Business
Michigan politicians face no small challenge in replacing the $1.9 billion single-business tax. And in addition to the SBT, discussions are centering on Michigan's $1.8 billion personal-property tax. The intricacies of how each tax affects differing business sectors, state and local governments and other constituencies, foreshadows the complex, high-stakes job Michigan faces in overhauling its business-tax structure. Beyond business-community proposals, other plans would:
* Enact no specific business tax to replace the SBT and eliminate at least the personal-property tax and Michigan's income tax, but raise the rate of Michigan's sales tax and extend it to some services.
* Give businesses the choice of paying a business-activity tax based on gross receipts, minus purchases from other firms; or a profits tax. Action rests with a joint legislative committee, which faces a Dec. 1 deadline, set by House and Senate leaders, to recommend a business-tax replacement plan. As of mid-October, there was no unanimity that deadline would be met.
Rep. Chris Ward
Majority Floor Leader
Michigan House of Representatives
The SBT is a bad tax. It's bad for Michigan's economy, and it has needed to go for a long time. I applaud the Detroit Regional Chamber for all its efforts to repeal this dreaded tax. I have legislation sponsored after the Detroit Regional Chamber's replacement plan, because I believe that we can do better. This is an important time, and we now are given the opportunity to restructure the tax environment in a way that is good for Michigan's business community and its citizens. We need to act quickly but judiciously.
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|Date:||Nov 1, 2006|
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