Public Act 40 of 2007

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• Introduced by Rep. Kate Ebli (D) on March 1, 2007, to revise the law authorizing tax breaks on certain commercial and industrial property so it reflect provisions of the new business tax proposed by Gov. Granholm (see Senate Bill 307 and House Bill 4368) to replace the revenue from the Single Business Tax (SBT), which expires at the end of 2007. 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 bill applies the personal property tax exemptions to the lower tax rate levied under the “commercial and industrial personal property” tax break law.
  • 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 June 14, 2007, to replace the previous version of the bill with one that represents an SBT replacement proposal proposed by House Democrats. This was replaced by a consensus business tax described in the House-passed version. The substitute failed by voice vote in the House on June 14, 2007.
  • Substitute offered by Rep. Steve Bieda (D) on June 14, 2007, to replace the previous version of the bill with one that is part of the business tax agreed to by legislative leaders and the governor, which will replace all the revenue from the Single Business Tax (SBT), which expires at the end of 2007 (and possibly raise some additional revenue). The substitute passed by voice vote in the House on June 14, 2007.
• Passed 102 to 4 in the House on June 14, 2007, to exempt commercial and industrial property from the 18-mill local school operating tax, and exempt just industrial property from the 6-mill state education tax. This is part of the business tax agreed to by legislative leaders and the governor, which will replace all the revenue from the Single Business Tax (SBT), which expires at the end of 2007 (and possibly raise some additional revenue). The main parts of the tax are a 0.8 percent tax on gross receipts minus purchases and inventory, and a 5 percent tax on earnings (these rates are approximate), and an alternative earnings (or profits) tax of 1.8 percent for small businesses. The exempted school taxes would be replaced by revenue from these new taxes.
  Who Voted "Yes" and Who Voted "No"
• Received in the Senate on June 19, 2007.
  • Referred to the Senate Finance Committee on June 19, 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 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. 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.