KEY LEGISLATION:
House Passes
Tax Relief Package
House Republicans passed their tax-relief package on a straight party-line
vote prior to the Labor Day weekend. Speaker Craig DeRoche (R-Novi)
was
hoping to win at least a few Democratic votes, but that caucus retained
its
solidarity against the GOP package.
The $1-billion tax-cutting package was tie-barred to a package of bills
closing some tax loopholes in Michigan, helping to pay for some of the
cuts.
While Democrats agreed with the loophole closings, they remained unified
in
their opposition to the overall package, claiming it goes too far and
that
the GOP left the negotiating table.
Senate Majority Leader Ken Sikkema (R-Wyoming) also voiced reservations
about the package and said Senate consideration won’t take place
until the
budget is finally completed for the new fiscal year that begins October
1.
The main components of the proposed tax relief are as follows:
• Reduce the Single Business Tax standard filing rate from 1.9
percent to
1.8 percent for 2007 and 1.7 percent for 2008 and beyond. Allow a 15-percent
personal property tax credit for all industrial personal property, which
would phase up to 20 percent for 2009 and beyond.
• Reduce the small business tax rate (businesses must meet specific
criteria
to file as a small business) from 2.0 to 1.4 over three years, beginning
in 2008.
• Shift the apportionment formula for multi-state businesses to
100 percent
sales by 2008; for 2006 and 2007 the formula would be 95 percent sales,
2.5
percent property and 2.5 percent payroll.
• Grant up to a 50-percent personal property tax credit for industrial
personal property purchased in 2006 and 2007. Eliminate the remaining
50-percent tax on employer-provided health care over four years, beginning
in 2008.
• Increase the income disqualifiers for the small-business credit
from
$115,000 to $175,000 for 2007 and beyond and provide for an inflationary
adjustment.
The tax loopholes do not appear to affect most Michigan retailers and
include:
• Eliminating the sales tax exemption for driver training vehicles.
• Eliminating the use tax exemption for driver training vehicles
and the use
tax exemption for international calls and WATTS lines.
• Creating a tax amnesty period and enhanced penalties for those
businesses
that do not participate.
• Returning to the post-Proposal A system where the taxable value
of
commercial and industrial rental property is adjusted upward or downward
based on occupancy changes.
• Decoupling the federal manufacturing deduction scheduled to take
effect in 2006.
• Requiring business activity of out-of-state affiliates to be
consolidated in determining
eligibility for small business credit.
• Eliminating the apprenticeship tax credit.
• Preventing manipulation of credit/loss carry forwards.
• Increasing thresholds for gross receipts/excess compensation.
• Eliminating the sales tax exemption for prison sales.
Violent Video Game Sales Restrictions Pass House
A package of Senate-passed bills making it illegal to sell or rent video
games that contain “ultra-violent” material won approval in
the House and
should reach the governor’s desk within a week. MRA opposed the
bills, which
have not survived constitutional scrutiny in the other states that have
passed similar measures.
A lawsuit will almost certainly be filed by the video game industry
as soon
as Governor Granholm signs the bills, which she is expected to do. Granholm
has come out strongly for the bills, and both the GOP and Democrats
want to
claim credit on the issue.
Public Meeting
Tonight on Groundwater Withdrawals
Sen. Patty Birkholz (R-Saugatuck) has called one last town hall hearing
on
the Water Legacy Plan seeking to regulate groundwater withdrawals in
the
state. The meeting will be held at 7 p.m., today (September 6) in Northville
at the Township Community Hall.
Birkholz is also apparently planning on revealing her comprehensive
legislative plan on water on Sept. 15. No details are available yet
on what
she will be proposing.
KEY BILL INTRODUCTIONS:
No new introductions at this time.
To view the content and current status of retail-related
bills, visit BillTrack,
MRA's legislative tracking database exclusively for members, at
www.retailbilltrack.com
If you are currently receiving Capitol F@cts by fax and
would like to receive
it via e-mail, please contact Kathleen Wilson at 517.372.5656 or
kawilson@retailers.com.
For back issues of online Capitol F@cts, visit MRA's main Capitol F@cts page.
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
517.372.5656
Toll-Free: 800.366.3699
Fax: 517.372.1303
govt_affairs@retailers.com
www.retailers.com
www.mallofmichigan.com
