Michigan Governor's Tax Plan to be Introduced This Week
We have learned that Michigan Governor Rick Snyder plans to have his tax restructuring plan introduced in the House of Representatives this week. The bill, he plans to have all of his proposals incorporated into one bill, will be sent to the House Tax Policy Committee.
The Governor proposes to repeal the Michigan Business Tax and through a series of credit and exemption eliminations, to reduce business taxes by $1.8 Billion. The proposal also includes replacing the Michigan Business Tax with a Michigan Corporate Income Tax.
The proposed Michigan Corporate Income Tax would be imposed on only C Corporations at the rate of 6%. All of the credits currently in the Michigan Business Tax Act would be eliminated except for the Small Business Credit. The nexus, apportionment and unitary provisions currently in the Michigan Business Tax Act would be retained.
To pay for the $1.8 Billion reduction in business taxes, the Governor proposes to eliminate or reduce several Michigan individual income tax credits or deductions including the earned income credit, the homestead property tax credit and the exemption for pension income.
The bill will need to make it through the House Tax Policy Committee as well as the Senate Finance Committee before coming to a vote in both the House and Senate on its way to the Governor for signature and enactment. The Governor wants the tax reform bill as well as next year's budget on his desk before the first of June.