To: Members of the State House

MEMORANDUM

To:Members of the Michigan Chamber of Commerce

From:Jim Barrett, President & CEO

Subject:Michigan Business Tax

Date:June 14, 2019

On June 28, the Michigan House and Senate both voted to pass a new Michigan Business Tax to replace Michigan’s expiring Single Business Tax and to provide personal property tax relief for many Michigan job providers. Governor Granholm is expected to sign the bill shortly.

The Michigan Chamber appreciates the effort by Legislators and the Administration to provide meaningful personal property tax relief; incentives for companies who create jobs and locate property in Michigan; and fair treatment of businesses organized as partnerships.

However, we regret to report that despite the efforts of the Michigan Chamber’s Tax Policy Committee to provide substantive and prompt feedback about the draft proposal, the Conference Committee (of Legislators) made only minor changes to the bill. Over 30 significant problems identified in the draft released on Monday night, June 25, and enacted by the legislature on Thursday, June 28, were left unresolved. As taxpayers have more time for a comprehensive review, additional problems may arise. We doubt this legislation is revenue neutral and are concerned that there is an overly aggressive approach to taxing companies, likely leading to unnecessary litigation. Numerous examples of “back-door” tax increases have been identified including double taxation on income. For these reasons, the Michigan Chamber reluctantly decided to oppose the legislation. As soon as we have had an opportunity to review the new tax plan in detail, we will provide members with a more comprehensive outline of the features.

There were a number of key legislators who deserve a lot of credit for their work on behalf of the business community including Representatives Steve Bieda, Ken Horn, Paul Condino, Brian Calley, Speaker Andy Dillon, and Senators Jud Gilbert and Mark Jansen.

After this bill is signed into law, we encourage you to carefully review the legislation and provide your lawmakers and the Michigan Chamber with feedback on the pros and cons. Over the summer, we will work with key lawmakers and the administration on implementation of the new law and develop a strategy going forward.

Please contact me, Tricia Kinley or Rich Studley at 517-371-2100 if you have any concerns.

600 S. Walnut Street ! Lansing, MI 48933 ! 517-371-2100 ! fax 517-371-7224