Public Act 37 of 2007

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• Introduced by Rep. Terry Brown (D) on March 1, 2007, to establish a new business tax to replace the revenue from the Single Business Tax (SBT), which expires at the end of 2007. This new “Michigan Business Tax” proposed by Gov. Granholm would impose levies on business profits, gross sales and on a firm’s total assets, very broadly defined. The asset tax would apply not just to assets located in Michigan, but all a firm’s assets, multiplied by the proportion of its sales that take place in Michigan. The proposal would also exempt business tools and equipment (the “personal property tax”) from the 6-mill state education tax and the 18-mill school operating tax. This would save businesses approximately $600 million, which amounts to around one-third of total personal property taxes (firms would still be subject to local personal property taxes.) There is also a tax credit for workers employed in a company headquarters located in Michigan. In the aggregate, the tax changes would take in approximately $480 million less than the SBT. However the bill is tie-barred to Senate Bill 307 (or House Bill 4368), which means it cannot become law unless one of those (identical) bills do. This bill contains the personal property tax school operating tax exemptions.
  • Referred to the House Tax Policy Committee on March 1, 2007.
    • Reported in the House on May 2, 2007, with the recommendation that the substitute (H-1) be adopted and that the bill then pass.
  • Substitute offered in the House on May 2, 2007, to replace the previous version of the bill with one that makes it part of the House Democrats' SBT replacement proposal. The substitute passed by voice vote in the House on May 2, 2007.
• Passed 109 to 0 in the House on May 2, 2007, to exempt business tools and equipment (the “personal property tax”) from the 6-mill state education property tax and the 18-mill school operating property tax, as part of the "Michigan Business Tax" proposal described in House Bill 4367. Reductions in state and local school tax revenues would be reimbursed by the proportionately higher business tax rates that bill would impose.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on May 8, 2007.
  • Referred to the Senate Finance Committee on May 8, 2007.
  • Substitute offered in the Senate on June 28, 2007, to replace the previous version of the bill with one that makes the bill fit with the new "Michigan Business Tax" described in Senate Bill 94, which will replace the taxes formerly collected under the Single Business Tax. The substitute passed by voice vote in the Senate on June 28, 2007.
• Passed 36 to 0 in the Senate on June 28, 2007, to exempt industrial business tools and equipment (personal property) from the 6-mill state education property tax, and all business personal property from the 18-mill local school operating tax, as part of the "Michigan Business Tax" proposal described in Senate Bill 94. Reductions in state and local school tax revenues would be reimbursed by the proportionately higher business tax rates that bill would impose.
  Who Voted "Yes" and Who Voted "No"
• Received in the House on June 28, 2007, to exempt industrial business tools and equipment (personal property) from the 6-mill state education property tax, and all business personal property from the 18-mill local school operating tax, as part of the "Michigan Business Tax" proposal described in Senate Bill 94. Reductions in state and local school tax revenues would be reimbursed by the proportionately higher business tax rates that bill would impose. Passed 109 to 0 in the House on June 28, 2007.
  Who Voted "Yes" and Who Voted "No"
• Signed by Gov. Jennifer Granholm on July 12, 2007.