Public Act 295 of 2005

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• Introduced by Sen. Nancy Cassis (R) on June 22, 2005, to revise the sales factor apportionment in the formula that determines the base on which a company’s Single Business Tax is levied. This provision relates to how much of a company’s sales are outside vs. within Michigan, which is one of the elements of a firm’s SBT base. The bill would base the apportionment formula 100 percent on sales, eliminating property and payroll factors.
  • Referred to the Senate Finance Committee on June 22, 2005.
    • Reported in the Senate on June 23, 2005, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
  • 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 Senate 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 in the Senate by voice vote on October 25, 2005.
• Passed in the Senate (23 to 15) on October 25, 2005, to revise the sales factor apportionment in the formula that determines the base on which a company’s Single Business Tax is levied. This provision relates to how much of a company’s sales are outside vs. within Michigan, which is one of the elements of a firm’s SBT base. The bill would base the apportionment formula 100 percent on sales, eliminating property and payroll factors. This is linked to Senate Bill 633, which would cut the SBT rate from 1.9 percent to 1.84 percent. [Vote Details and Comments]
• Received in the House on October 25, 2005.
  • Referred to the House Tax Policy Committee on October 25, 2005.
  • Amendment offered by Rep. David Law (R) on December 7, 2005, to reduce but not eliminate the weighting or apportionment of in-state payroll and property in the formula used to calculate a firm's Single Business Tax liability. The amendment passed in the House by voice vote on December 7, 2005.
• Passed in the House (100 to 2) on December 7, 2005, to revise the “sales factor apportionment” in the formula that determines the base on which a company’s Single Business Tax is levied. This provision relates to how much of a company’s sales are outside vs. within Michigan, which is one of the components of this Value Added Tax (VAT). The bill would reduce from 5 percent to 2.5 percent each the weighting or apportionment that is based on in-state payroll and property, and increase the sales factor from 90 percent to 95 percent. [Vote Details and Comments]
• Received in the House on December 13, 2005.
  • Amendment offered by Rep. David Law (R) on December 13, 2005, to phase in the proposed change over two years. The amendment passed in the House by voice vote on December 13, 2005.
• Passed in the House (107 to 1) on December 13, 2005, to revise the “sales factor apportionment” in the formula that determines the base on which a company’s Single Business Tax is levied. This provision relates to how much of a company’s sales are outside vs. within Michigan, which is one of the components of this Value Added Tax (VAT). In 2008 the bill would reduce from 5 percent to 2.5 percent each the weighting or apportionment that is based on in-state payroll and property, and increase the sales factor from 90 percent to 95 percent. This would be phased in starting in 2006, when the factors would go to 3.75 percent, 3.75 percent, and 92.5 percent, respectively. [Vote Details and Comments]
• Received in the Senate on December 14, 2005, to revise the “sales factor apportionment” in the formula that determines the base on which a company’s Single Business Tax is levied. This provision relates to how much of a company’s sales are outside vs. within Michigan, which is one of the components of this Value Added Tax (VAT). In 2008 the bill would reduce from 5 percent to 2.5 percent each the weighting or apportionment that is based on in-state payroll and property, and increase the sales factor from 90 percent to 95 percent. This would be phased in starting in 2006, when the factors would go to 3.75 percent, 3.75 percent, and 92.5 percent, respectively.
• Passed in the Senate (35 to 2) on December 14, 2005. [Vote Details and Comments]
• Signed by Gov. Jennifer Granholm on December 20, 2005.