February 9, 2007
On Thursday Governor Granholm unveiled her Budget Overview and her Tax
Restructuring Proposal. In her budget, Granholm calls for the creating
of 17
new state programs, even though the budget is $819 million in the hole
for
FY 2007.
$1.5 billion of her plan would be funded by a new $.02 tax on services.
In
addition, in a big blow to businesses in the state, business to business
transactions would now fall under this tax.
The governor also is proposing a doubling of the current OTP or other
tobacco products tax, which she estimates will raise an additional $36.6
million. By adding another $.05 to the cigarette tobacco tax $21 million
more is expected to be raised.
Always popular with this governor is the closing of certain tax "loopholes"
which she believes will bring in approx. $84 million more.
Other provisions of the governor's plan call for a 10% increase in the
liquor markup from 65% to 75%, generating about $29 million, and a federally
decoupled estate tax to generate about $119 million.
According to the governor, her new Michigan Business Tax does for
the following:
• Creates a business tax with the broadest base and the lowest
tax rate possible
• Provides substantial personal property tax relief to industrial
and commercial taxpayers
• Eliminates the tax on payroll, benefits and health care
• Preserves economic development tools to help attract new jobs
and investment
• Spreads the tax fairly to all types of business organizations
while
• ••••maximizing
the number of businesses receiving a tax cut
The MBT with revisions represents a $480 million tax cut from revenue
neutral SBT
Makes the tax simpler
Overviews of the proposals are available online at: http://www.mi.gov/budget/
Members are encouraged to study the broad strokes that have been made
available in order to assess what impact the changes could have on their
businesses.
KEY BILL INTRODUCTIONS:
No Bill to Introduce at this Time.
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
