2005 House Bill 4342 / Public Act 221

Eliminate SBT health care tax

Introduced in the House

Feb. 17, 2005

Introduced by Rep. Tim Moore (R-97)

To eliminate the Single Business Tax (SBT) that businesses pay on their employee health insurance costs. See also 2004 Senate Bills 672 and 673. Note: Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability.

Referred to the Committee on Tax Policy

Feb. 23, 2005

Reported without amendment

Without amendment and with the recommendation that the bill pass.

March 2, 2005

Passed in the House 66 to 44 (details)

To eliminate the Single Business Tax (SBT) that businesses pay on their employee health insurance costs. Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability.

Received in the Senate

March 3, 2005

Referred to the Committee on Finance

Nov. 10, 2005

Substitute offered

To replace the previous version of the bill with one that reflects the agreement struck between Gov. Jennifer Granholm and Republican legislative leaders to adopt modest business tax cuts and a scaled-down "21st Century Jobs Fund." See House-passed version for details.

The substitute passed by voice vote

Amendment offered by Sen. Nancy Cassis (R-15)

To move back the effective date of the tax cut from 2008 to 2009, which is the correct year to make this embody the agreement struck between the governor and legislative leaders. The 2008 date was a drafting error.

The amendment passed by voice vote

Passed in the Senate 36 to 2 (details)

To reduce but not eliminate the Single Business Tax (SBT) that businesses pay on their employee health insurance costs. Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bill would tax firms on 40 percent of their health care costs beginning in 2009.

Received in the House

Nov. 10, 2005

Amendment offered by Rep. Gary McDowell (D-107)

To tie-bar the bill to House Bill 4529, meaning this bill cannot become law unless that one does also. HB 4529 would require the Department of Community Health (DCH) to negotiate discounts with drug companies, make public the names of companies that refuse to make deals, and restrict dispensing drugs made by those companies to Medicaid recipients.

The amendment failed 49 to 57 (details)

Amendment offered by Rep. Aldo Vagnozzi (D-37)

The amendment failed 50 to 56 (details)

Amendment offered by Rep. Marie Donigan (D-26)

To tie-bar the bill to House Bill 5191, meaning this bill cannot become law unless that one does also. HB 5191 would enter Michigan into a State of Illinois program under which residents can buy lower-priced prescription drugs from Canada, Great Britain and Ireland, which sell drugs at close to the marginal cost for one extra pill, rather than the U.S. price which reflects drug development costs.

The amendment failed 45 to 61 (details)

Amendment offered by Rep. Alma Smith (D-54)

To tie-bar the bill to Senate Bill 734, meaning this bill cannot become law unless that one does also, SB 734 would impose a new “Medicaid tax” on some large employers (including Wal-Mart).

The amendment failed 50 to 56 (details)

Passed in the House 106 to 0 (details)

To reduce but not eliminate the Single Business Tax (SBT) that businesses pay on their employee health insurance costs. Because the SBT is a value added tax, offering health insurance to employees raises a firm’s SBT tax liability. The bill would tax firms on 40 percent of their health care costs beginning in 2009.

Signed by Gov. Jennifer Granholm

Nov. 21, 2005