Governor’s Tax Restructing Plan
Governor Granholm recently unveiled her long awaited tax-restructuring package. The Governor announced a year ago that during 2004, State Treasurer Jay Rising would undertake a broad-based review of the various state taxes with the objective of designing a structure that shifts collection away from the states vanishing manufacturing industry to its consumer-based industry. Key ingredients of the plan include:
- Cutting the rate for all SBT Taxpayers – The rate would be reduced from 1.9% to 1.2 % and 2% to 1.2% for the small business calculation.
- Creating a Manufacturing Personal Property Tax Credit – manufacturers would get a credit for 35 % of personal property taxes paid on property used for manufacturing and R&D purposes.
- Changing to 100% Sales Factor Apportionment – the calculation of the Michigan share of the tax base would be based exclusively on the firms’ percentage of Michigan sales.
- Increasing the Weight of Profit in the SBT Tax Base – Corporate profits would receive an addition weighting of 2.0.
- Creating R&D Credit – Taxpayers would receive a credit for 1.3% of compensation paid to employees engaged in research and development.
- Eliminating Excess Compensation Reduction.
- Eliminating the Gross Receipts Reduction.
- Eliminate special credit for unincorporated businesses.
- Eliminate special credit for telephone property taxes paid.
- Treat compensation of employees leased from a professional employer organization as compensation of the client business.
- Make small business credit eligibility independent of business organization or out-of-state affiliation.
- Changing the Taxation of Insurers – impose a 2% premiums tax like that imposed by most other states.
- Eliminating Special Property Tax Treatment for Commercial Rental Property – Treat changes in value like all other value changes are treated for assessment purposes. Information provided by Karoub Associates.
I was just overwhelmed trying to figure out if this news is going to help me, or hurt me.
Does anyone else in here think that the tax regulations are too complex? It makes my head hurt…
blue
Just because you can, doesn’t mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I’m a hackmeister…they might be right! Of course, they might be wrong too!
Replies
Any change in the tax code winds up being bad for some and good for others.
I know, that's an obvious statement. But I'm also very cynical about tax changes.
Looks like Michigan's tax structure is complicated if that outline is comprehensive.
In Texas the tax structure is pretty heavy on ad valorem property taxes and sales tax.
VIVA SANCHO RON!
IC, I'm pretty ignorant when you use words like AD Valorem and when Michigan talks about all the things they mentioned.
The one thing I' certain about....Michigan isn't getting the tax dollars from manufacturing that they used to and now we face a tax shift. All I see is a new wave of hits on my business.
I just hope I hit the Ohio border before they bust me! I'm getting the he** out of this rust belt state! I see the biggest future in this state in recycling...rusty junk metal!
blueJust because you can, doesn't mean you should!
Warning! Be cautious when taking any framing advice from me. There are some in here who think I'm a hackmeister...they might be right! Of course, they might be wrong too!
ad valorem means at value
The taxation of real property at it's market value.
There are two bills in the lege now that may help to put some fairness into the tax appraisal system.
One allows some members of the Appraisal Districts to be popurarly elected.
The other allows taxpayers to challenge their appraisals in small claims court rather than in District Court which would require hiring a lawyer.
Good luck on your move to a warmer climate.
VIVA SANCHO RON!