Since the Federal Tax Cuts and Jobs Act passed at the end of 2017, Michigan businesses have been working to fully understand the impact of federal tax reform on state taxes. One area that will have the greatest impact on a state’s business tax liability is the new limitation on the amount of interest expenses that can be deducted from corporate income. For Michigan businesses, this change could impact Michigan businesses to the tune of $100 million.
Fortunately, last week, Chamber-backed legislation – Senate Bill 1097 – was introduced by Senate Finance Committee Chairman, Senator Brandenburg, that would allow businesses to ignore the new interest expense deduction limitation for state tax purposes. While the committee was set to meet on September 5th to report the bill, the committee had to cancel due to the flurry of legislative activity taking place that day on proposals to increase the minimum wage and mandate paid sick leave. The legislature will be back in session later this month and another hearing is expected.
For more information on this issue, please contact Dan Papineau at firstname.lastname@example.org.