Key improvements to the MBT pass out of Senate Finance
LANSING--Two bills that amend the Michigan Business Tax Act to save the state tens of millions of dollars and help remove barriers to growth and employment passed out of the Michigan Senate Finance Committee today, said Committee Chair Nancy Cassis.
Senate Bill 1242 phases out the 21.99 percent MBT surcharge over three years beginning Jan. 1, 2009. SB 1535 places a $50 million yearly cap on film credits available under the MBT, beginning in calendar year 2008.
Cassis noted that a phase-out or reduction of the surcharge was the primary recommendation that came from the findings of the Senate MBT Impact Assessment Subcommittee.
“The surcharge phase-out is critical to helping retain our businesses,” said Cassis, R-Novi. “Many business owners indicated they would expand or locate elsewhere due to the onerous effects of the surcharge.”
Sen. Mark Jansen, sponsor of SB 1242, said he was thrilled the Senate committee passed the bill.
“Phasing out the MBT surcharge is a measure that is desperately overdue,” said Jansen, R-Gaines Township, chair of the MBT Impact Assessment Subcommittee. “Hearing after hearing we heard from business owners across the state about the need to phase out this surcharge. I’m relieved to see this vital piece of legislation receive committee approval.”
The surcharge would be reduced from the current 21.99 percent to 14.66 percent in tax year 2009 and 7.33 percent in tax year 2010, and it would be eliminated in tax year 2011.
Sen. Jud Gilbert said that since lawmakers approved a package of MBT film credits earlier this year, concern about the overall costs of the program has increased.
“This is of particular relevance because the administration has repeatedly claimed that the state could not afford other universal modifications to the MBT (such as SB 1038 or SB 1242), which are arguably fairer,” said Gilbert, R-Algonac.
Limiting the film credits to $100 million will likely save the state tens of millions of dollars, Cassis said. She also noted that there is significant doubt whether the credits will create enough economic activity to offset their considerable costs.
SBs 1242 and 1535 now head to the full Senate for consideration.
Posted: Thursday, September 25, 2008
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