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2007 House Bill 5097: Revise sales tax “bad debt” allowance
Public Act 105 of 2007
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- Introduced by Rep. Steve Bieda (D) on August 8, 2007, to limit a “bad debt” allowance that businesses can deduct from the amount of sales tax they are required to pay, so that only firms that remit taxes for the a specific transaction qualify for the deduction. Essentially the bill would retroactively change some definitions in the Sales Tax Act (related to who is a "taxpayer" for purposes of claiming a bad debt deduction) that will have the effect of reversing the judgement of the Supreme Court in the case "DaimlerChrysler Services North America, LLC v. Department of Treasury," under which the state will be required to honor $93 million in tax refund claims. The bill would also result in an additional $30 million in annual sales and use tax paid by business in the future.
- Referred to the House Tax Policy Committee on August 8, 2007.
- Substitute offered by Rep. Steve Bieda (D) on September 24, 2007, to replace the previous version of the bill with one that revises details but does not change the substance of the bill as previously described. The substitute passed by voice vote in the House on September 24, 2007.
- Passed 57 to 52 in the House on September 24, 2007.
Who Voted "Yes" and Who Voted "No" - Received in the Senate on September 25, 2007.
- Referred to the Senate on September 25, 2007.
- Passed 22 to 16 in the Senate on September 30, 2007, to limit a “bad debt” allowance that businesses can deduct from the amount of sales tax they are required to pay, so that only firms that remit taxes for the a specific transaction qualify for the deduction. Essentially the bill would retroactively change some definitions in the Sales Tax Act (related to who is a "taxpayer" for purposes of claiming a bad debt deduction) that will have the effect of reversing the judgement of the Supreme Court in the case "DaimlerChrysler Services North America, LLC v. Department of Treasury," under which the state will be required to honor $93 million in tax refund claims. The bill would also result in an additional $30 million in annual sales and use tax paid by business in the future.
Who Voted "Yes" and Who Voted "No" - Signed by Gov. Jennifer Granholm on October 1, 2007.
Most Recent Comments
1) Thanks INDEED by jmd364 on October 3, 2007If these idiots would read the bills before they vote on them they might find out they left a loop hole big enough for a semi-tractor trailer.
Don't encourage them by saying thank you for doing a lousy job to begin with. We pay these people a full time wage!
If they worked for me, I would fire them. A partial shut down of the government speaks for itself. THEY ARE INCOMPETENT!
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Thanks, Steve Bieda, for closing a loophole in the sales tax law.
Previous legislation allowed sales tax payers to claim a deduction when they hadn't even made a payment. This legislation, putting sales tax on an accounting basis that agrees with Federal tax law, is long overdue.
What other loopholes exist in the Michigan Treasury that should be closed ?
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Introduced in the House on August 8, 2007, to limit a “bad debt” allowance that businesses can deduct from the amount of sales tax they are required to pay, so that only firms that remit taxes for the a specific transaction qualify for the deduction. Essentially the bill would retroactively change some definitions in the Sales Tax Act (related to who is a "taxpayer" for purposes of claiming a bad debt deduction) that will have the effect of reversing the judgement of the Supreme Court in the case "DaimlerChrysler Services North America, LLC v. Department of Treasury," under which the state will be required to honor $93 million in tax refund claims. The bill would also result in an additional $30 million in annual sales and use tax paid by business in the future
The vote was 57 in favor, 52 opposed and 1 not voting
(House Roll Call 392 at House Journal 95)
Click here to view bill details.
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