Public Act 229 of 2005

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• Introduced by Rep. Paul Condino (D) on August 17, 2005, to eliminate the Single Business Tax (SBT) corporate farm credit; eliminate the availability of the SBT small business credit for limited liability companies; prohibit the SBT deduction of gains from out-of-state affiliates; restrict the use of losses for certain consolidated or combined SBT returns; eliminate the SBT Use Tax exemption for insurance companies; and more. The SBT is a 1.9 percent value-added tax (VAT) that is applied not a firm’s income, but to a complicated tax base formula that includes payroll, profits, sales and more. These provisions revise various parts of that formula.
  • Referred to the House Tax Policy Committee on August 17, 2005.
    • Reported in the House on August 31, 2005, with the recommendation that the substitute (H-2) be adopted and that the bill then pass.
  • Substitute offered in the House on August 31, 2005, to replace the previous version of the bill with one that incorporates changes resulting from ongoing negotiations over the tax cut package as a whole. This version was subsequently superceded by another substitute with further changes. See Sheen substitute. The substitute failed by voice vote in the House on August 31, 2005.
  • Substitute offered by Rep. Fulton Sheen (R) on August 31, 2005, to replace the previous version of the bill with one containing technical changes to its complex business tax provisions. The substitute passed by voice vote in the House on August 31, 2005.
  • Amendment offered by Rep. Fulton Sheen (R) on August 31, 2005, to clarify which business entities are covered by the bill, and make its provisions conform to the SBT cuts in House Bill 5108. The amendment passed by voice vote in the House on August 31, 2005.
• Passed 57 to 49 in the House on August 31, 2005, to make various revsions to provisions of the Single Business Tax.. Specifically, to add to "business income" in the SBT calculation formula the amount of the federal domestic production activities deduction; treat members of a limited liability company (LLC) like officers, shareholders, partners, and individuals for purposes of the small business credit; incluce all members of a group of companies with common ownership in determining whether a controlled group is small enough to take the small business credit; eliminate the SBT apprenticeship credit; prevent firms with an unused SBT loss or credit obtained while filing separately from using up that loss or credit faster by filing a joint return with an affiliate in a later year; and specify that underpayment due to some of the changes proposed in the bill with respect to the small business credit would not subject the taxpayer to penalties. The bill is part of a tax revision package that trades off tax cuts with certain increased tax levies and other measures to create a net business tax cut. See House Bill 5108.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on September 6, 2005.
  • Referred to the Senate Finance Committee on September 6, 2005.
  • Substitute offered in the Senate on October 25, 2005, to replace the previous version of the bill with one that makes it part of a business tax cut proposal offered by Sen. Majority Leader Ken Sikkema as an alternative to a larger tax cut passed by the House. This is linked to Senate Bill 633, which would cut the SBT rate from 1.9 percent to 1.84 percent. The substitute passed by voice vote in the Senate on October 25, 2005.
  • Amendment offered by Sen. Valde Garcia (R) on October 25, 2005, to not repeal the apprenticeship credit for construction industry apprentices, and set the maximim credit at $2,000 annually per apprentice. The amendment passed by voice vote in the Senate on October 25, 2005.
• Passed 22 to 16 in the Senate on October 25, 2005, to make various revsions to provisions of the Single Business Tax. Specifically, to add to "business income" in the SBT calculation formula the amount of the federal domestic production activities deduction; treat members of a limited liability company (LLC) like officers, shareholders, partners, and individuals for purposes of the small business credit; include all members of a group of companies with common ownership in determining whether a controlled group is small enough to take the small business credit; eliminate the SBT apprenticeship credit (except for construction industry apprentices); prevent firms with an unused SBT loss or credit obtained while filing separately from using up that loss or credit faster by filing a joint return with an affiliate in a later year; and specify that underpayment due to some of the changes proposed in the bill with respect to the small business credit would not subject the taxpayer to penalties. The bill is part of a tax revision package that trades off tax cuts with certain increased tax levies and other measures to create a net business tax cut. See Senate Bill 633.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on October 25, 2005.
  • Substitute offered by Rep. Fulton Sheen (R) on November 10, 2005. The substitute passed by voice vote in the House on November 10, 2005.
  • Amendment offered by Rep. Fulton Sheen (R) on November 10, 2005. The amendment passed by voice vote in the House on November 10, 2005.
  • Amendment offered by Rep. Fulton Sheen (R) on November 10, 2005, to clarify references in the bill to other statutes. The amendment passed by voice vote in the House on November 10, 2005.
  • Amendment offered by Rep. Paul Condino (D) on November 10, 2005, to repeal the sunset of the Single Business Tax currently scheduled to take place at the end of 2009. The parties dispute whether this was part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders on modest business tax cuts and subsidies for selected businesses. The amendment failed 37 to 68 in the House on November 10, 2005.
    Who Voted "Yes" and Who Voted "No"
  • Amendment offered by Rep. Brenda Clack (D) on November 10, 2005, to levy a higher Single Business Tax rate after 2008 on a firm that does not pay employees at least $7.15 per hour. The amendment failed 48 to 20 in the House on November 10, 2005.
    Who Voted "Yes" and Who Voted "No"
  • Amendment offered by Rep. Andy Meisner (D) on November 10, 2005, to levy a higher Single Business Tax rate after 2008 on the Michigan operations of firms that are based in a "tax haven" country, or are located here "for the purpose of inducing the enterprise to locate outside" Michigan or the U.S., or which "contribute to the violation of internationally recognized workers rights" of workers in other countries (including "acceptable" miniumum wages and occupational health and safety regulations). The amendment does not specify how the Michigan Department of Treasury would define and enforce this last provision. The amendment failed 45 to 38 in the House on November 10, 2005.
    Who Voted "Yes" and Who Voted "No"
• Passed 58 to 47 in the House on November 10, 2005, to repeal various tax-reducing exemptions, deductions and credits in the Single Business Tax as part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt modest business tax cuts and a scaled-down "21st Century Jobs Fund." The changes in this version are similar to those in previous versions of this bill.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on November 10, 2005.
  • Amendment offered by Sen. Nancy Cassis (R) on November 10, 2005, to clarify references in the bill to other statutes. The amendment passed by voice vote in the Senate on November 10, 2005.
• Passed 23 to 15 in the Senate on November 10, 2005, to repeal various tax-reducing exemptions, deductions and credits in the Single Business Tax as part of an agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt modest business tax cuts and a scaled-down "21st Century Jobs Fund." The changes in this version are similar to those in previous versions of this bill.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on November 10, 2005, to concur with the a minor change in the Senate-passed version of the bill. Passed 57 to 49 in the House on November 10, 2005.
  Who Voted "Yes" and Who Voted "No"
• Signed by Gov. Jennifer Granholm on November 21, 2005.