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2006 House Bill 5743: Eliminate SBT
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- Introduced by Rep. Leon Drolet (R) on February 22, 2006, to eliminate the state Single Business Tax (SBT), with the repeal effective Oct. 1, 2007. This is Michigan's tax on business operations, and it collects around $1.85 billion per year. The state and local governments also levy property tax on business tools and equipment. The state also levies many license, permit and other fees on certain types of operations.
- Referred to the House Tax Policy Committee on February 22, 2006.
- Reported in the House on March 9, 2006, without amendment and with the recommendation that the bill pass.
- Amendment offered by Rep. Rick Baxter (R), Rep. David Farhat (R), Rep. Roger Kahn (R), Rep. David Law (R), Rep. Leslie Mortimer (R) and Rep. Mike Nofs (R) on March 16, 2006, to establish as the intent of the legislature that any SBT replacement tax should be "less burdensome and less costly to employers, more equitable, and more conducive to job creation and investment," and should not include an increase in the rate or base of the income, sales or use taxes. The amendment passed 103 to 3 in the House on March 16, 2006.
Who Voted "Yes" and Who Voted "No"
- Amendment offered by Rep. Jack Brandenburg (R) on March 16, 2006, to abolish the SBT at the end of 2007, rather on Oct. 1. The amendment passed by voice vote in the House on March 16, 2006.
- Referred to the House Tax Policy Committee on February 22, 2006.
- Passed 63 to 42 in the House on March 16, 2006, to eliminate the state Single Business Tax effective Jan. 1, 2008. This is Michigan's tax on business operations, and it collects around $1.85 billion per year. The state and local governments also levy property tax on business tools and equipment. The state also levies many license, permit and other fees on certain types of operations.
Who Voted "Yes" and Who Voted "No" - Motion by Rep. Dave Hildenbrand (R) on March 16, 2006, to give the bill immediate effect. The motion failed 68 to 35 in the House on March 16, 2006.
Who Voted "Yes" and Who Voted "No" - Motion by Rep. Mary Waters (D) on March 16, 2006. The motion failed 62 to 38 in the House on March 16, 2006.
Who Voted "Yes" and Who Voted "No" - Received in the Senate on March 21, 2006.
- Referred to the Senate Finance Committee on March 21, 2006.
- Reported in the Senate on March 22, 2006, with the recommendation that the substitute (S-2) be adopted and that the bill then pass.
- Amendment offered in the Senate on March 22, 2006, to prohibit replacing the tax with a new that is paid directly by individuals, including an increase in the rate or base of the income, sales, or use taxes, or property taxes levied on an individual's principle residence. The bill requires the governor's "council of economic advisors" to recommend a new tax to replace all or part of the SBT revenues by Jan. 1, 2007. The amendment passed by voice vote in the Senate on March 22, 2006.
- Amendment offered by Sen. Michael Prusi (D) on March 22, 2006, to not eliminate the SBT unless another business tax that raises at least as much revenue has already been adopted. The amendment failed 16 to 22 in the Senate on March 22, 2006.
Who Voted "Yes" and Who Voted "No"
- Referred to the Senate Finance Committee on March 21, 2006.
- Passed 21 to 17 in the Senate on March 22, 2006, to eliminate the state Single Business Tax, with the repeal effective Jan. 1, 2008. This is Michigan's tax on business operations, and it collects around $1.85 billion per year. The state and local governments also levy property tax on business tools and equipment. The state also levies many license, permit and other fees on certain types of operations. The bill prohibits replacing the tax with a new that is paid directly by individuals, including an increase in the rate or base of the income, sales, or use taxes, or property taxes levied on residential property (but not commercial or industrial property). The bill requires the governor's "council of economic advisors" to recommend a new tax to replace all or part of the SBT revenues by Jan. 1, 2007.
Who Voted "Yes" and Who Voted "No" - Received in the House on March 22, 2006.
- Amendment offered by Rep. Steve Bieda (D) on March 30, 2006, to not eliminate the SBT unless another business tax that raises at least as much revenue has already been adopted.
- Motion in the House on March 30, 2006, to support the decision of the chair that the Bieda amendment requiring a replacement business tax before the SBT can be eliminated is not a proper amendment given that the issue is whether to concur with the Senate version of the bill. The motion passed 57 to 49 in the House on March 30, 2006.
Who Voted "Yes" and Who Voted "No"
- Motion in the House on March 30, 2006, to support the decision of the chair that the Bieda amendment requiring a replacement business tax before the SBT can be eliminated is not a proper amendment given that the issue is whether to concur with the Senate version of the bill. The motion passed 57 to 49 in the House on March 30, 2006.
- Amendment offered by Rep. Steve Bieda (D) on March 30, 2006, to not eliminate the SBT unless another business tax that raises at least as much revenue has already been adopted.
- Passed 67 to 39 in the House on March 30, 2006, to eliminate the state Single Business Tax, with the repeal effective Jan. 1, 2008. The bill prohibits replacing the tax with a new that is paid directly by individuals, including an increase in the rate or base of the income, sales, or use taxes, or property taxes levied on residential property (but not commercial or industrial property). It also requires the governor's "council of economic advisors" to recommend a new tax to replace all or part of the SBT revenues by Jan. 1, 2007.
Who Voted "Yes" and Who Voted "No" - Received in the House on March 30, 2006, to give the bill immediate effect. Passed 64 to 42 in the House on March 30, 2006.
Who Voted "Yes" and Who Voted "No" - Vetoed by Gov. Jennifer Granholm on March 31, 2006.
Most Recent Comments
1) "Restructuring Approach" by Anonymous Citizen on April 27, 2007Instead of limiting a tax on this and increasing a tax on that, then dealing with a loophole here and a loophole there, what about a "restructuring approach". What about the MI FairTax. Replace the current complex and loophole ridden system that takes billions of dollars each year to comply with and enter into a new generation of economic growth and prosperity with a simple sales tax that rids us all of loopholes and misconceptions of who actually pays this tax or that one.
Reply
why do you have to "replace the income"? and why do you think that this is a guarantee?
neither is the case in personal budgets all around the state.
you can "replace the income" by cutting unnecessary expenses. get government back to the proper role of government, and leave out lots of those very expensive regulations that cost taxpayers money and do very little for the taxpayers.
imagine the money you could save if you fired all the members of "gun boards" around the state. imagine the savings in compliance paperwork if you stopped frivolous handgun registration, and the rediculous idea of "permits to purchase" a handgun.
the federal government relies on instant background checks, why don't you?
imagine the money that could be saved if every city and township could get rid of two or three "officials" who's only purpose is to collect taxes, fees, and fines from the taxpayers.
imagine that if this money were "turned loose", it might even be spent on things that you already collect taxes on. heaven forbid that you could get more tax money by cutting taxes.
imagine the small businesses that would open if the registration and regulation fees, fines, and taxes weren't so prohibitive?
tear down the barriers to business, and businesses will come.
Reply
Rep. Cushingberry, having reserved the right to explain his nay vote, made the following statement:
"Mr. Speaker and members of the House:
The single business tax replaced eight specific taxes and was designed to share the tax burden of business on those who had avoided paying for years. It was a modified version of the business activities tax which was in effect in Michigan from 1952 until 1966. The author was a well respected Republican from Lapeer County who wanted to foster expansion in manufacturing, chemicals, and the energy industries in Michigan and to spread the business tax burden away front fact there is no real economic recovery in America since the deficits have risen over 789 billion dollars, the great lakes states around us are still experiencing economic distress and loss of real income for individuals and great fiscal stress on their governments. Indeed if you factor out the war machine and increase in oil related costs there is no economic growth in America.
Michigan's situation is more related to failed National policy than the single business tax.
New industry business leaders in a Western Michigan University study are more interested in trained work force and state infrastructure than the business tax as a reason for location.
By continuous restating of this flawed principle that Michigan is losing jobs because of taxes is disingenuous at best and generally against the weight of empirical evidence. I invite my colleagues to The Economic Policy Institute work in this area and The Center on Budget and Policy for some reality checking on their rhetoric about the a correlation of business taxes and job creation or loss.
The fact is that Michigan has long been a high wage, well trained workforce State with excellent public services and amenities. The fixation on taxes has led to detonation of our asethic and practical advantages. We have devastated adult education, mental health, and a direct correlation between loss jobs and the prison buildup could be made as we have focused our resources on the lock'em up mentality.
Crime has dropped with the birthrate and we have yet directed too many of our resources to this alleged public safety crisis to our own detriment.
Clearly to have to close all the Colleges and Universities and Community Colleges (the loss revenue of 1.8 billion dollars equals those budgets) could only exacerbate our tenuous situation and leave us in more dire straits.
These extreme measures proposed by this majority are wrong headed, against the great weight of evidence, and are patterned after the failed Washington policies which are bankrupting the whole country.
Finally our auto industry is in peril because of the horrendous national foreign policy which has caused oil prices to grow form .98 per gallon in 2000 to 2.50 per gallon today. The excessive profits of the oil companies are in stark contrast to the huge losses in our American auto industry.
We would be better served if those issues were addressed and the Michigan legislative majority would help influence their parties national leadership to correct the horrendous trade policies which place us at such a disadvantage."
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