SB 384 & HB 5390: When Proposal A was passed in 1994, Michigan voters were promised a permanent decrease in property taxes in exchange for a permanent increase in the sales tax and the imposition of a flat, 6-mil state education tax. Over time, school districts have deviated from this agreement and have sought out ways to increase local property taxes. In this case, through sinking fund milleages.
HB 4779, if enacted, would create a $.06 per mile tax on all commercial vehicles. The tax will be collected quarterly by filing a form and remitting payment to the Michigan Department of Treasury.
HB 4215 increases the threshold in which a small taxpayer can benefit from a full exemption of personal property taxes. Currently, if a business has less than $80,000 in personal property, they can file for a full exemption from the personal property tax.
HB 4214 would allow a taxpayer eligible for the small taxpayer personal property tax exemption (a business with less than $80,000 in personal property) to go before the July Board of Review in addition to the March Board of Review if they missed the February deadline for submitting the exemption. The bill also provides for forgiveness if a taxpayer eligible for the small taxpayer exemption forgets to file the exemption in the first year of being operational. If a taxpayer forgets to file the exemption the first year they were eligible, they can petition the March or July Board of Review in the subsequent year to receive the exemption retroactively.
In an effort to increase taxes, local governments across Michigan are urging the Legislature to legitimize recent attempts by assessors to artificially increase property assessments. Instead of going through the normal process for a tax increase, which requires a vote of the people, local governments have been inflating the value of property to yield higher property tax assessments.
Michigan currently has a single, flat income tax rate of 4.25%. Adopting a graduated rate would create several different income tax rates. As individuals earn more, their tax rate would go up.
HB 4781 will increase taxes on ALL Michigan employers.
Corporate Income Tax Increase: The proposed legislation would increase Michigan’s 6% Corporate Income Tax to 8.5% starting in tax year 2020. Increasing the Corporate Income Tax by 42% would put Michigan’s rate near the Country’s highest joining States like Illinois and California.
New Entity Level Tax on Passthroughs: HB 4781 would apply a new 8.5% tax on passthrough income. Currently, passthrough owners pay 4.25% on business income through their personal income tax. This proposal doubles the rate passthrough owners would pay starting in tax year 2020.
It’s hard to believe that many parts of Michigan do not have access to broadband internet services. Unless you live in an area without access to broadband you would not know how wide spread the problem is. In the past, legislators have introduced bills to allow for local units of government to offer broadband services with revenues collected from a special millage.
Nothing is more frustrating for Michigan’s businesses than when our state’s tax policy makes them uncompetitive within their industry; that is exactly the case for aircraft repair facilities.