Advocacy News – April 29, 2021
Chamber led HB 4288 (Tisdel) recently moved out of committee on a party line vote. The legislation would provide $190 million in tax savings for “passthrough businesses” or ones organized as partnerships, LLCs, and S-Corporations, for example. The savings come at no cost to state revenues, meaning this proposal would provide $190 million in tax savings for businesses with no loss in state revenues. The tax dollars businesses save are from the federal government. For more details on the bill see the previous article HERE.
All Republicans on the committee supported the bill while all Democrats “passed” except for Democratic State Representative Julie Brixie who voted no.
The Michigan Chamber has worked in good faith with the Department of Treasury who initially opposed the bill based on certain technical objections to the language and the need for $10 million in additional funding for one-time implementation changes. After months of work, all the Department’s issues with the bill language were resolved and a $10 million appropriation is in the budget that is currently moving through the legislature. Even though we have given the Department everything they have requested, they still oppose on “broader budget concerns”.
We have come to find out that these “broader budget concerns” deal with the income tax trigger expected to be hit and result in an automatic lowering of the state income tax rate. (See related article HERE.) In fact, during committee Representative Brixie offered an amendment that would not allow the tax cut to be enacted unless the trigger provision is repealed. The amendment was not adopted but, this is why she voted no and her colleagues “passed”.
Democratic lawmakers and, it seems, the Department of Treasury are trying to link a bill that will keep $190 million in OUR State’s economy as opposed to sending it to Washington D.C. to a totally unrelated tax policy issue. It is incredibly unfortunate that the Democrats on the Tax Policy Committee could not go along with a simple, no brainer tax relief proposal. We think they will soon see their strategy is poor and get on board. Time will tell.
For more information on this issue please contact Dan Papineau at dpapineau@michamber.com