Public Act 240 of 2003

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• Introduced by Sen. Nancy Cassis (R) on September 16, 2003, to gradually eliminate the Single Business Tax businesses pay on their employee health insurance costs. Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bill is part of a House and Senate legislative package that would phase out over five years the tax on the cost companies pay to provide of health care benefits to employees. The package is comprised of House Bills 5041 and 5042, and Senate Bills 672 to 674, each of which would cut the tax on health care expenses by 20 percent in one of the next five years.
  • Referred to the Senate Finance Committee on September 16, 2003.
    • Substitute offered in the Senate on December 11, 2003, to replace the previous version of the bill with one which is part of a package to cut 40 percent of the SBT health insurance tax, instead of all of it. See Senate-passed bill for details. The substitute passed by voice vote in the Senate on December 11, 2003.
    • Reported in the Senate on December 11, 2003, with the recommendation that the substitute (S-4) be adopted and that the bill then pass.
• Passed 37 to 1 in the Senate on December 11, 2003, to gradually eliminate 40 percent of the Single Business Tax businesses pay on their employee health insurance costs, beginning in 2004. Senate Bill 672 eliminates 20-percent of the tax in 2005. Senate Bill 673 eliminates another 20-percent in 2006. Combined, the two bills would save business some $36 million each year in SBT taxes. Note: Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bills are part of a December 2003 agreement struck between Sen. Majority Leader Ken Sikkema and Gov. Granholm to close a $900 million gap between desired state spending and expected revenues. Part of that deal includes Senate Bill 852, which would increase the income rate from 3.9 percent to 4.0 percent between Jan. 1, 2004 and July 1, 2004.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on December 16, 2003.
  • Referred to the House Tax Policy Committee on December 16, 2003.
  • Substitute offered in the House on December 18, 2003, to replace the previous version of the bill with one which, combined with Senate Bill 673, gradually phases in a 50 percent cut of the employee health insurance tax. The substitute passed by voice vote in the House on December 18, 2003.
• Passed 105 to 0 in the House on December 18, 2003, to gradually eliminate 50 percent of the Single Business Tax businesses pay on their employee health insurance costs, beginning in 2004. Senate Bill 672 eliminates five-percent of the tax in 2004, 20-percent in 2005, and 40 percent in 2006. Senate Bill 673 establishes the tax cut at 50 percent of the current tax level beginning in 2007. Combined, the two bills would save business some $45 million each year in SBT taxes. Note: Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bills are part of a December 2003 agreement struck between Sen. Majority Leader Ken Sikkema and Gov. Granholm to close a $900 million gap between desired state spending and expected revenues. Part of that deal includes Senate Bill 852, which would increase the income rate from 3.9 percent to 4.0 percent between Jan. 1, 2004 and July 1, 2004.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on December 18, 2003.
• Passed 37 to 0 in the Senate on December 18, 2003, to gradually eliminate 50 percent of the Single Business Tax businesses pay on their employee health insurance costs, beginning in 2004. Senate Bill 672 eliminates five-percent of the tax in 2004, 20-percent in 2005, and 40 percent in 2006. Senate Bill 673 establishes the tax cut at 50 percent of the current tax level beginning in 2007. Combined, the two bills would save business some $45 million each year in SBT taxes. Note: Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bills are part of a December 2003 agreement struck between Sen. Majority Leader Ken Sikkema and Gov. Granholm to close a $900 million gap between desired state spending and expected revenues. Part of that deal includes Senate Bill 852, which would increase the income rate from 3.9 percent to 4.0 percent between Jan. 1, 2004 and July 1, 2004.
  Who Voted "Yes" and Who Voted "No"
• Signed by Gov. Jennifer Granholm on December 23, 2003.