KEY LEGISLATION:

STREAMLINED SALES TAX BILL PASSES SENATE

Senate Bill 433, legislation to create a level playing field for Michigan
retailers in sales tax collection, cleared one legislative hurdle by winning
approval in the Senate on a 28-8 vote. The legislation would enter Michigan
into a multistate agreement to simplify sales tax laws to boost the
collection of sales and use taxes for items sold by "remote sellers" -
catalog, Internet or other direct ship merchants.

MRA is extremely supportive of the legislation and has worked with Sen.
Joanne Emmons (R-Big Rapids), the bill's sponsor, to drum up letters of
support for SB 433. MRA also drafted an opinion article for The Detroit News
supporting the bill, after two Republican House members blasted the proposal
in the paper. In the response, MRA outlined three reasons for supporting the
bill: fairness for retailers who currently collect the tax and operate at a
6-percent competitive disadvantage to out-of-state retailers who don't
collect; lost education funding, currently in excess of $180 million a year
and growing as a result of uncollected sales and use tax; and the possibility that
an additional increase in the sales tax or other business taxes may be necessary
if this problem is not rectified.

SB 433 faces a much more difficult battle in the House, since the two
Republicans who criticized the legislation in the press sit on the Tax
Policy Committee, where the bill will be referred. MRA encourages members
to voice their support for the legislation to members of that committee.
Contact information follows. When contacting these representatives, please
stress the need to remove the economic advantage out-of-state retailers have
over Michigan businesses.

HOUSE MAILING ADDRESS: P.O. BOX 30014, Lansing, MI 48909

HOUSE MINORITY LEADER ANNOUNCES
BID FOR DETROIT MAYOR

Rep. Kwame Kilpatrick (D-Detroit) held a press conference to confirm he is
running for mayor of Detroit. Kilpatrick has been widely considered a
frontrunner to succeed Dennis Archer, who surprised the city and state last
month when he announced he would not seek reelection this November.
As the House minority leader and son of Congresswoman Carolyn Cheeks
Kilpatrick, he presents a strong candidate who has won cooperation and
support from members of both parties. Kilpatrick has his work cut out for
him, however; he was a distant second in a head-to-head poll with Detroit
City Council President Gil Hill, trailing by nearly 40 points. If unsuccessful
in this effort, Kilpatrick would be allowed to keep his current position in the House.

BUDGET ANALYSTS CONFIRM REVENUE SHORTFALL

This week's Revenue Estimating Conference confirmed that the state will
experience a severe revenue shortfall due to the economic slowdown. For the
2001-02 budget currently making its way through the legislature, state
economic officials project there will be $517.5 million less available in
the general fund than was forecast in January. This is expected to put a
strain on the areas of the budget that make up most of the General
Fund - prisons, health care and higher education. Lawmakers also must make
cuts or tap the state's rainy day fund to offset a projected$342.6 million
deficit in the current year ending September 30.

KEY BILL INTRODUCTIONS:

HB 4762, sponsored by Rep. LaMar Lemmons (D-Detroit) , to provide tax on
amount of mileage driven in Michigan.

HB 4764, sponsored by Rep. Andy Neumann (D-Alpena), to provide for telephone
structural separation of local exchange companies with more than 250,000
users.

HB 4775, sponsored by Rep. Lauren Hager (R-Port Huron), to expand reciprocal
wage agreements to include Canada and Canadian provinces and territories.

HB 4779, sponsored by Rep. Judith Scranton (R-Brighton), to revise deadline
for filing to two times per year.

SB 477, sponsored by Sen. Valde Garcia (R-St. Johns), to allow for state
agencies to set tax for telephone or leased wire communications.

SB 433, sponsored by Sen. Joanne Emmons (R-Big Rapids), to provide for
streamlined sales and use tax administration act for Internet transactions.

SB 480, sponsored by Sen. Shirley Johnson (R-Royal Oak), to eliminate health
care costs from business tax base.

SB 490, sponsored by Sen. Bill Bullard (R-Highland Twp), to provide business
tax exemption for multiple employer welfare dental benefits.

For back issues of Capitol F@cts on-line visit MRA's web site at http://www.retailers.com/capfax/capfax.html.

Specific comments or questions regarding this bulletin should be directed to:
Kathleen Wilson, Administrative Assistant to the Governmental Affairs Office at
kawilson@retailers.com.
Michigan Retailers Association
603 South Washington Avenue
Lansing, MI 48933
Phone: 517.372.5656
Toll Free: 800.366.3699
Fax: 517.372.1303
govt_affairs@retailers.com
http://www.retailers.com
http://www.mallofmichigan.com

Click here to find more information about any of the bills referenced above.