Michigan Votes Forum

Introduced in the Senate on September 16, 2003, to gradually eliminate 40 percent of the Single Business Tax businesses pay on their employee health insurance costs, beginning in 2004. Senate Bill 672 eliminates 20-percent of the tax in 2005. Senate Bill 673 eliminates another 20-percent in 2006. Combined, the two bills would save business some $36 million each year in SBT taxes. Note: Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bills are part of a December 2003 agreement struck between Sen. Majority Leader Ken Sikkema and Gov. Granholm to close a $900 million gap between desired state spending and expected revenues. Part of that deal includes Senate Bill 852, which would increase the income rate from 3.9 percent to 4.0 percent between Jan. 1, 2004 and July 1, 2004

The vote was 37 in favor, 1 opposed and 0 not voting

(Senate Roll Call 611 at Senate Journal 103)

Click here to view bill details.

Senator Cassis' statement is as follows:

In adopting Senate Bill Nos. 672 and 673, I am confident that my esteemed members of the Senate have agreed that as important as it is to balance the state budget, it is equally critical to ensure a healthy, strong Michigan economy and the revenues to support essential and necessary governmental services. Phasing out the tax penalty on health care, paid by the private sector employers, is intended to retain and create jobs. Make Michigan's economy more competitive by reducing an unfair tax burden, and lastly, to continue to foster private health care to workers, lessening the reliance on our already strapped government programs