2007 House Bill 5097 (Revise sales tax “bad debt” allowance )

Public Act 105 of 2007

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• Introduced by Rep. Steve Bieda 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 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 in the House by voice vote on September 24, 2007.
• Passed in the House (57 to 52) on September 24, 2007. [Vote Details and Comments]
• Received in the Senate on September 25, 2007.
  • Referred to the Senate on September 25, 2007.
• Passed in the Senate (22 to 16) 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. [Vote Details and Comments]
• Signed by Gov. Jennifer Granholm on October 1, 2007.

Comments

Introduced by Rep. Steve Bieda on August 8, 2007. Passed in the House (57 to 52) on September 24, 2007. New Comment