LANSING – State Representatives Lee Gonzales (D-Flint Twp.) and Richard E. Hammel (D-Mt. Morris Township) said today that the passage of the Michigan Business Tax (MBT) sets Michigan up to achieve a level of job creation and business investment that will accelerate Michigan's economic recovery.
"The Michigan Business Tax rewards companies that make a commitment to our workers, who deserve the opportunity to compete for the good-paying jobs of the future," said Gonzales. "The MBT will jumpstart Michigan's economy and get our state moving in the right direction."
House Democrats approved a comprehensive new business tax Thursday that rewards investment, protects Michigan-based companies, and safeguards funding for education, health care, and police and fire protection. The MBT replaces the outdated Single Business Tax, which expires at the end of the year. The Senate also approved the plan.
"By wrapping up the MBT and sending this comprehensive plan to the Governor for her signature, my colleagues and I are sending a strong message: Let's get Michigan going again, right now," said Hammel. "The MBT will attract emerging industries and good-paying jobs to Michigan while generating funds for our local governments. It's a win-win because it supports our communities and it supports our businesses."
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 Michigan investment and 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.