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2007 House Bill 5198: Impose new 6 percent tax on many services

Public Act 93 of 2007

  1. Introduced by Rep. Steve Tobocman (D) on September 7, 2007, to repeal a use tax exemption on toll free phone services (800-numbers, WATTS lines, etc.) and international calls.
    • Referred to the House Tax Policy Committee on September 7, 2007.
    • Substitute offered by Rep. Steve Tobocman (D) on September 18, 2007, to replace the previous version of the bill with one that does not impose a tax on services, but would exempt disabled veterans from the state 6 percent use tax. The substitute passed by voice vote in the House on September 18, 2007.
  2. Passed 57 to 51 in the House on September 18, 2007, to exempt disabled veterans from the state 6 percent use tax. The bill was passed and sent to the Senate as a "vehicle" for a possible tax on some services, but without that actual provision. This was done because bills must "lay over" in the other body for at least five days before being voted on, and if a tax increase is to be approved by Oct. 1 it is necessary to have a "vehicle" bill that has done so.
    Who Voted "Yes" and Who Voted "No"

  3. Received in the Senate on September 19, 2007.
    • Referred to the Senate on September 19, 2007.
    • Referred to the Senate Finance Committee on September 24, 2007.
    • Substitute offered in the Senate on September 28, 2007. The substitute passed by voice vote in the Senate on September 28, 2007.
  4. Passed 24 to 13 in the Senate on September 28, 2007.
    Who Voted "Yes" and Who Voted "No"

  5. Received in the House on September 28, 2007. Failed 0 to 106 in the House on September 28, 2007.
    Who Voted "Yes" and Who Voted "No"

  6. Received in the Senate on September 29, 2007.
  7. Passed 19 to 19 in the Senate on October 1, 2007, to impose a 6 percent tax on a wide variety of services, including various personal services, and a number of services used primarily by businesses. Altogether the new tax will take some $750 million. Major components include a $230 million tax on business consultant services, $98 million on "office administration" services, and $50 million on janitorial services, to name just a few. More than half the revenue is from taxing business services. The bill is part of a package to avoid spending cuts in the Fiscal Year 2007-2008 budget; the other major tax increase is to raise the state income tax from 3.9 percent to 4.35 percent (House Bill 5194).
    Who Voted "Yes" and Who Voted "No"

  8. Received in the House on September 29, 2007.
  9. Passed 56 to 53 in the House on September 30, 2007, to impose a 6 percent tax on a wide variety of services, including various personal services, and a number of services used primarily by businesses. Altogether the new tax will take some $750 million. Major components include a $230 million tax on business consultant services, $98 million on "office administration" services, and $50 million on janitorial services, to name just a few. More than half the revenue is from taxing business services. The bill is part of a package to avoid spending cuts in the Fiscal Year 2007-2008 budget; the other major tax increase is to raise the state income tax from 3.9 percent to 4.35 percent (House Bill 5194).
    Who Voted "Yes" and Who Voted "No"

  10. Signed by Gov. Jennifer Granholm on October 1, 2007.

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