Mich. voters approve business tax cut

Michigan voters have approved a ballot measure to end a state tax on manufacturing and small business equipment.
AP Wire
Aug 5, 2014

 

Proposal 1, the only statewide question on the primary ballot, will reimburse local governments for their lost personal property tax revenue by sharing a portion of the state's use tax.

The personal property tax is paid by businesses and particularly manufacturers and is based on the value of their machinery, office furniture and other equipment. Some Michigan communities rely on the tax revenues to pay for basic services.

State lawmakers already repealed the tax on small businesses and manufacturers, but the issue required voter approval, which it now has.

"You buy a personal vehicle and they don't charge you an extra 6 percent for it every year. But they do if you're a business," said Jonathan Pack, 30, of Traverse City, who voted to end the tax. "We get taxed quite a bit, and this one doesn't make sense to me."

Michigan's business community never has been a fan of the personal property tax, which applied to machines, office furniture and other equipment.

Business owners said it discouraged investment and was a compliance headache.

Gov. Rick Snyder called the tax "dumb" and said it was a disincentive for businesses to come to the state.

Under a deal that lawmakers, municipalities and businesses reached with Snyder's administration, local governments would see the lost money fully replaced by a portion of Michigan's 6 percent tax on out-of-state purchases, lodging assessments and telecommunications.

Supporters call it a win-win.

The measure had no organized opposition.

If voters had not approved the proposal, the laws enacted by Snyder and the Legislature would have been halted.

Comments

Tri-cities realist

"In God we trust, all others must show us their data". Hey AP, (like they care or would listen) what was the vote count? What was the percentage? Have 100% of precincts reported? So many questions, so few answers. I hope the Trib doesn't pay more than about $5 per year for the wire stories...

newspaperlawyer

I just can't wait to see where the loss revenue will come from. The state has never give the tax payer anything back.

Vladtheimp

1. Language of Proposal incomprehensible;

2. Another unelected "Authority" created;

3. Supported by AARP, Public Employee Unions AND Big Business (Michigan Manufacturers Association, Ford, GM and Chrysler spent over $7 Million in Support of Proposal 1)?

4. Grab your wallet!

bigdeal

I don't ever want to hear small business people rail on state welfare recipients anymore, you just got your biggest increase in YOUR business welfare ever!

Wolverine49457

In government speak a tax cut is less of an increase than desired. I was wondering the same where is the money to make up for lost revenue coming from?

dogbert1918

so what does Lanivan feel about this? you're a small business owner aren't you?

Lanivan

Gee dogbert, I was hoping to sneak by on this one.

Obviously, I voted yes on Prop 1, but my heart really wasn't in it. The PPT is a flawed and obviously unfair tax which has a clear negative impact, especially on small businesses that are growing and making capital investments in machinery and other equipment. The PPT is also a flawed and unreliable way to fund local governments.

Although I appreciate the fact that this is a positive and immediate benefit to businesses of all sizes, and that there is at least the promise in the language of the law to protect local governments, I am concerned that eventually this cut in revenue will not be entirely offset by the expected increase in business expansion and investment. I would like to have seen a better developed proposal with a clearer plan for revenue replacement.

In light of the current state of affairs in Michigan - with unemployment and new job creation figures relatively flat, the need for increased infrastructure revenue, and some very bad legislation passed that studies show will possibly only add to the deficit, long-term - (Right-to-Work, cutting of corporate tax rate in half, raising taxes on seniors, repeal of motorcycle helmets, among others), I would not be surprised if we will at sometime in the future have to reach for our wallets.

A good link that helped me understand the proposal (new law):

http://www.eclectablog.com/2014/...

Barry Soetoro

Glad you asked! Lanivan's buying the first three rounds on Friday!

 

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