Introduced by Sen. Cameron Brown (R) on October 25, 2007, to reduce to 3 percent beginning in 2011 the new 6 percent tax on many personal and business services (House Bill 5198 passed to avoid spending cuts in the Fiscal Year 2007-2008 budget. The service tax is expected to levy some $750 million in new taxes annually, two-thirds of which is imposed on business-to-business services.
Referred to the Senate Finance Committee on October 25, 2007.
Substitute offered in the Senate on November 1, 2007, to replace the previous version of the bill with one that would move the effective date of the new service tax to Dec. 20, 2007, and is tie-barred to Senate Bill 838, meaning this bill cannot become law unless that one does also. SB 838 would. The substitute passed by voice vote in the Senate on November 1, 2007.
Passed 22 to 14 in the Senate on November 1, 2007, to move back the effective date of the new service tax from Dec. 1 to Dec. 20, 2007. The bill is tie-barred to Senate Bill 838, meaning this bill cannot become law unless that one does also. SB 838 would repeal the tax. Who Voted "Yes" and Who Voted "No"
Received in the House on November 6, 2007.
Referred to the House Tax Policy Committee on November 6, 2007.
Reported in the House on November 7, 2007, with the recommendation that the substitute (H-2) be adopted and that the bill then pass.
Substitute offered by Rep. Paul Condino (D) on December 1, 2007, to replace the previous version of the bill with one that instead provides amnesty for any businesses that did not collect the tax in the 16 hours it was in effect before repeal by the legislture. The substitute passed by voice vote in the House on December 1, 2007.
Amendment offered by Rep. Brian Calley (R) and Rep. Paul Condino (D) on December 1, 2007, to also allow a business to just return to the buyer any of the repealed tax it collected. The amendment passed by voice vote in the House on December 1, 2007.
Passed 106 to 0 in the House on December 1, 2007, to provide “amnesty” for any business that did not collect the 6 percent tax on many services that the legislature passed on Oct. 1, 2007 and repealed on Dec. 1, 2007 - 18 hours after it went into effect. Also, to establish that firms that did collect the tax should refund it to the buyer, or remit the proceeds to the Department of Treasury, where the person or business who paid the tax can apply for a refund. Who Voted "Yes" and Who Voted "No"
Received in the Senate on December 4, 2007, to provide “amnesty” for any business that did not collect the 6 percent tax on many services that the legislature passed on Oct. 1, 2007 and repealed on Dec. 1, 2007 - 18 hours after it went into effect. Also, to establish that firms that did collect the tax should refund it to the buyer, or remit the proceeds to the Department of Treasury, where the person or business who paid the tax can apply for a refund. Passed 38 to 0 in the Senate on December 4, 2007. Who Voted "Yes" and Who Voted "No"
Signed by Gov. Jennifer Granholm on December 10, 2007.
1) Sen. Prusi's "journal statement" by Admin003 on November 2, 2007 Senator Prusi's statement is as follows:
Earlier when the Majority Floor Leader made the motion to discharge the Finance Committee from further consideration of this bill, I was all set to leap up to amend the motion to do what we typically do and discharge any committee from any consideration of the bill because, again, we have not had any consideration of this bill; as we had no consideration of some of the earlier very important, very complex issues that have significant import on the economy of this state, on the business of this state, or on the citizens of this state. We compressed what should have been seven months' worth of work in one weekend. Now, lo and behold we are here a month later trying to compress--even less--time another significant or a momentous issue that reflects, I think, one good reason why the people of the state of Michigan are very cynical about the Legislature; that we take these important, complex, and momentous issues and we compress our deliberation into a few people in a side room without any committee hearings and without any testimony from the affected people of this state. And I think that starts us down that road again. I think it is a road that we ought to be very careful we tread upon.
Our leader indicated that he expects us to work in a bipartisan, collegial fashion and come up with a policy that is going to matter and a policy that is going to actually work for this state. I am keeping my fingers crossed because if we are going to compress this kind of decision-making into this kind of a timeframe, we are going to be back here in January fixing that, and February fixing the next one, and in March fixing the other one.
So if we are going to work on this legislation, do it in a bipartisan fashion. Let's have enough people in the room and have enough input in the room, rather than expecting all 38 of us to cast significant votes on something that has been worked on by people outside of this chamber, people not elected to represent the people of this state. So I would just ask that we all be given a chance to put our input into this and to make suggestions and to make changes and to do the work that we were elected to do; not the interest groups who are pushing for this, not the people who start to squawk after our last go-round with tax policy around here.
So I am not real comfortable taking $50 million regardless of what we do down the road. This has a significant impact into the continuation budget that we just passed here a couple of nights ago. That is not a frivolous thing to be doing here--to take $50 million and to just toss it way because we have not figured out what we are doing here. We did the wrong thing a month ago and we are going to try to do the right thing here and now.
So, Mr.President and colleagues, I am very reluctant and I don't believe that I can put up an affirmative vote for this bill at this time.
2) Sen. Garcia's "journal statement" by Admin003 on November 2, 2007 Senator Garcia's statement is as follows:
As you know, I was one of the three votes for this use tax on this side of the aisle. I think this is a good compromise. I disagree, respectfully, with my colleagues on the other side of the aisle who are not in a position to vote for this yet. I think that it does give us time to craft a better solution. It was something that I felt that we needed to do. We still need to replace the revenue because the state does need it. I know I have a lot--at least I thought I had a lot--of friends in the business community, and I hope I still do.
But my point is we want to make sure that we take a little bit more time and find a reasonable solution. I think the Minority Leader's comments about working together is a good point. I think it is important that we take this step forward to buy some time to craft a better solution. I just wish that my friends on the other side of the aisle would help us in this. I think it would go a long way to demonstrating trust and that we can all work together on this.
3) Sen. Schauer's "journal statement" by Admin003 on November 2, 2007 Senator Schauer's statement is as follows:
This bill is intended, as I understand it, as a way for us to start a process and a dialogue about tax policy in this state. Unfortunately, faced with a very difficult and important deadline just over a month ago, we didn't take the time that we now have the opportunity to take in crafting tax policy on a bipartisan basis that's good for Michigan.
This bill, in my opinion, is very much a work in progress. It is a vehicle bill, frankly, that contains more questions than answers. So I'm not in a position to vote "yes" on this bill. I do expect that the House and the Senate will work together and will enact good public policy that is revenue-neutral, including generating revenue to make up for any delay in implementation of the current use tax.
So this is a start of a process; one that I expect to be bipartisan in nature and, at the end of the day, produces tax policy on a bipartisan basis that hopefully many of us will be able to support.