Advocacy News – March 3, 2022
Several significant tax provisions moved through both chambers of the Michigan Legislature this week – representing action on reforms as well as new rollbacks due to the unprecedented one-time funding available in the state.
163j:
Today, 163j reform moved onto the next chamber of the Legislature as the Michigan Senate gave the nod to the Senate Bill 195, sponsored by Sen. Aric Nesbitt, with a vote of 23-14. The legislation allows Michigan unitary business groups to file their business interest expense deduction at the group level, rather than individual, streamlining and matching the longstanding federal practice. The passage comes after the Michigan Chamber testified in support of the bill. The legislation now makes its way to the Michigan House for consideration.
Corporate Income Tax Rollback:
In addition to Senate Bill 195, the Michigan Senate also considered and passed Senate Bill 392 with a 22-15 vote. The bill, sponsored by Sen. Jon Bumstead, would roll back the state’s corporate income tax (CIT) to 3.9% from the current 6.0%. The rollback, should the bill be signed into law, would begin January 1, 2022. The Michigan Chamber supports the concept of the bill, though is monitoring the provision in context of other budget and tax measures to ensure positive impact and sustainability.
Delivery and Installation Exemptions:
Yesterday, House Bills 5080-5081, which would exempt certain delivery and installation services from sales and use tax, passed out of the Michigan Senate Committee on Finance with a 5-2 vote. The passage of the bill comes with support from the Michigan Chamber. It now moves onto the Senate floor for next steps.
Tax Relief for Michiganders:
The Michigan Senate today moved (22-15) historic tax reform legislation that passed (62-42) the Michigan House of Representatives earlier this week. The action comes after negotiations between Republican legislative leaders that combined aspects of both bodies’ previous plans. The measure, which now goes to Gov. Whitmer’s desk for consideration, includes a rollback of the personal income tax from 4.25% to 3.9%, a $500 childcare income tax credit for qualified dependents, as well as tax exemptions up to $20,000 if filing individually and $40,000 if filing jointly for Michigan seniors.
For more information, please contact Leah Robinson at lrobinson@michamber.com.