2009 Senate Bill 69 (Revise small business tax rate restrictions )

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Introduced by Sen. Nancy Cassis (R) on January 27, 2009, to increase the maximum earnings cap and executive compensation cap that limit certain a firm’s eligibility for the lower Michigan Business Tax small business rate, extend an MBT "entrepreneurial tax credit" beyond 2010, ease certain eligibility preconditions on the credit, and increase the value of that credit.
- Referred to the Senate Finance Committee on January 27, 2009.
  - Reported in the Senate on March 10, 2009, with the recommendation that the substitute (S-1) be adopted and that the bill then pass.
- Substitute offered in the Senate on March 11, 2009, to replace the previous version of the bill with one that does not increase the value of the MBT "entrepreneurial tax credit". The substitute passed in the Senate by voice vote on March 11, 2009.
- Amendment offered by Sen. Gilda Jacobs (D) on March 12, 2009, to strip out the provision raising the business owners' compensation caps that limit eligibility for the lower small business MBT rate. The amendment failed in the Senate (16 to 21) on March 12, 2009. [Vote Details and Comments]
- Amendment offered by Sen. Samuel B. Thomas, III (D) on March 12, 2009, to tie-bar the bill to House Bills 4453-4455, meaning this bill cannot become law unless that one does also. Those bills impose new restrictions on mortgage lenders using the foreclosure-by-advertisement. The amendment failed in the Senate (18 to 19) on March 12, 2009. [Vote Details and Comments]
Passed in the Senate (23 to 14) on March 12, 2009, to increase the maximum earnings cap and owners' compensation cap that limit certain a firm’s eligibility for the lower Michigan Business Tax small business rate, extend an MBT "entrepreneurial tax credit" beyond 2010, ease certain eligibility preconditions on the credit. [Vote Details and Comments]
Received in the House on March 12, 2009.
- Referred to the House Tax Policy Committee on March 12, 2009.

Most Recent Comments

1) Re: 2009 Senate Bill 69 (Revise small business tax rate restrictions ) [by Admin003 on March 13, 2009]

Senator Gilbert’s statement is as follows:

I followed very closely the debate on Senate Bill No. 69, which provided some tax relief for those who run small businesses. We pass legislation on a regular basis providing tax relief. Think about some of the targeted tax credits we have given to several businesses, the film industries, Hemlock Semiconductor, and recently, for car batteries at a far greater expense than what we have proposed here for small business.

I think those who support those have already accepted the idea that tax relief encourages economic activity and creates more jobs. My question for the other side of the aisle who opposed this is why does this not apply to small business as well? Most economists will tell you that the big driver in jobs in this economy is small business; they create jobs on a regular basis. The problem is this credit is diffused throughout the community. There is no press release that goes along with the creation of one or two jobs in small business.

Another concern was that huge compensation of $180,000. Yet not once have I heard anyone complain about compensation given to those in the film industry, Hemlock Semiconductor, or those who may get some generous compensation through the battery credits. Nobody is concerned about that, but small business, $180,000 that is not a good thing.

And, I would point out another thing—you know, just because we create the level of compensation that will allow this small business tax credit to take affect, we don’t raise one person’s salary. That is up to the market in how their business does. I think the other side should be consistent. I would like them to treat small business in the same way as they treat big business.

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2) Re: 2009 Senate Bill 69 (Revise small business tax rate restrictions ) [by Admin003 on March 13, 2009]

Senator Cassis’ second statement is as follows:

Senate colleagues, this is not really an issue of office or compensation. It is an issue of when they go over that 180,000 threshold, they then are kicked into the full Michigan business tax. So they lose a slight favorable, helpful lower rate that helps them retain jobs and stay in business. We’re hearing from them and they are saying, “We’re going to have to close our doors, or we’re going to let more people go.”

So the idea is not to in any way deal with the compensation alone. It’s the effect of trying to expand the small business credit, the alternative business tax that is within the Michigan business tax to save jobs—to save jobs.

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3) Re: 2009 Senate Bill 69 (Revise small business tax rate restrictions ) [by Admin003 on March 13, 2009]

Senator Richardville’s statement is as follows:

As the chair of the Banking and Financial Institutions Committee, I would like the members to know that the House of Representatives sent these three bills over yesterday afternoon. After working on them for several months with the chair of the House banking committee, we have an agreement to continue to work on a priority level to get these bills complete.

I think it would be erroneous to bypass that system and take the bills up today.

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