SBT Replacement Plans
Brandt Coultas
February 7, 2007
The Chamber supports replacing the Single Business Tax (SBT)
with a revenue source that meets the following criteria:
- Simple for a business to understand and compute, and for the
State to administer
- Fairly applied to all businesses and business sectors
The Chamber has a committee of members that is actively working
on this issue. Here is a summary of the new tax proposals
that have been floated to date:
Michigan
Business Tax: The MBT has three main components:
gross receipts, assets which would be taxed at .125 percent and
business income which will be taxed at 1.875 percent.
The MBT was proposed by Governor Granholm in late 2006.
For more information, download MBT overview from the link
below.
Annual
business license fee : Businesses would pay an annual
fee to do business in Michigan, based on Michigan sales. A
company would figure their Michigan sales and use a fee schedule to
determine what they owe. This plan has been proposed by the
Detroit Regional Chamber of Commerce.
Fair Tax
: This plan would eliminate the single business tax, the
personal property tax, and the state income tax. In its
place, the state would raise the sales tax from 6% to 8.5% or
higher. The tax would only be applied once at the point
of final consumption, and money would be given back to lower income
residents to overcome the regressive nature of the tax. The
Fair Tax has been proposed by State Representative Fulton Sheen
(R-Plainwell).
Business activities
tax : A business activities tax based on Michigan
sales which would start at $350,000. Businesses with at least
1 employee that have sales of less than $350,000 would pay a flat
fee of $150. The tax would be set up so both the SBT and the
personal property tax would go away. The Grand Rapids Area
Chamber of Commerce proposed this plan.
Income
tax/license fee combination : Bring back a corporate
income tax, but keep the rate low and also have a business license
fee. Use this combo in place of the SBT and possibly a
portion of the personal property tax. The Michigan Chamber of
Commerce proposed this plan.
Business
and Economic Stimulus (BEST) : plan proposed by
Senate Majority Leader Michael D. Bishop (R-Rochester). This
proposal is supported by the Small Business Association of Michigan
(SBAM). BEST plans on stimulation economic growth, expand jobs and
increase business investments by cutting the taxes of Michigan's
job providers by $290 million.
