LANSING (WWJ/AP) – Legislation aiming to eliminate several hundred million dollars in taxes businesses annually pay on equipment is on its way to the governor.
The Michigan Legislature voted late Thursday and early Friday to repeal the industrial personal property tax.
Supporters say the move would be good for business. Opponents counter the legislation doesn’t replace all the money the tax generates for local governments.
Repeal would be phased in over a decade, saving businesses about $600 million a year when the phaseout is complete. Supporters say that will give cities and counties time to adjust.
The new measure would reimburse 80 percent of the money lost for emergency services such as police and fire and other municipal services. Reimbursement money would come from part of an existing tax paid on out-of-state purchases, and the money the state loses from that diversion would come from expiring business tax credits for battery manufacturers and other companies. Local governments could levy special assessments to recoup the rest.
Voters could cancel the tax repeal during a 2014 referendum by rejecting a plan to divert revenue from another tax to local governments.
The proposal is the latest business-friendly tax restructuring effort sought by Gov. Rick Snyder, who worked with lawmakers last year to eliminate the Michigan Business Tax and replace it with a six percent corporate income tax that two-thirds of businesses don’t have to pay.
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