House OKs Bill That Would Avert $1.1B Tax Payout
LANSING, Mich. (AP) - Michigan would keep an estimated $1.1 billion it is at risk of being forced to refund to out-of-state companies under a bill approved Tuesday by the House, which moved to insulate the state from a potentially budget-busting court decision.
On lawmakers' first day of a four-week session before the November election, the House voted 100-10 to send the legislation to the Senate, whose Republican leader vowed final approval by the end of September.
The bill would limit a July state Supreme Court ruling so that a $6 million refund owed to IBM is not extended to 134 similar tax cases involving non-Michigan businesses. Gov. Rick Snyder's administration has warned it could cost $1.1 billion, plus interest, mostly in the fiscal year that will start in October.
The attorney general's office, representing the state Treasury Department, has asked the high court to reconsider its 4-3 ruling. Majority Republicans said the House decided to act Tuesday so the state is prepared in case the Supreme Court declines to take a rare step and change its mind.
"Nobody in their right mind would have put together a piece of tax legislation to benefit out-of-state companies versus our own Michigan companies," said House Appropriations Committee Chairman Joe Haveman, R-Holland.
At issue in the ruling were Michigan's 2007 and 2011 business tax overhauls and their impact on out-of-state corporations, which argue they should be able to use an older formula that effectively kept their tax bills lower. The high court overruled two lower courts that decided for the state.
"With all due respect to the rule-of-law courts, I think they missed this one. So I would very strongly intend to clarify the misconceptions of ... the Michigan Business Tax rewrite," said Senate Majority Leader Randy Richardville, R-Monroe.
Tuesday was the first of 11 session days scheduled until Oct. 2, when legislators will leave until after the election unless they show up for a tentative voting day set for Oct. 22.
It's likely the Republican-led Legislature will wait until after the election to tackle hot-button issues such as permanently raising at least $1 billion in fuel taxes to improve roads and bridges and amending the state's civil rights law to include protections for gay, lesbian, bisexual and transgender residents.
Richardville said the Senate, where his call to significantly increase gasoline taxes stalled in June, would focus this month on bills to require warranties on state roadwork and establish a competitive bidding process for county road commissions.
"Before we throw money at a problem, which has been most of the discussion, let's make sure that we've got the right avenues in place, make sure the money's spent well," he said.
A coalition of major companies and business groups wants to update the law to prohibit discrimination because of sexual orientation or gender identity - an issue that Snyder, a Republican, has said lawmakers should consider. He has stopped short of specifically backing such a proposal that employers contend is important to help retain and attract talent, drawing criticism from his Democratic opponent, Mark Schauer.
Supporters hope bills are introduced this month after similar ones died in the past two-year sessions because of conservatives' concerns about infringing on employers' religious freedom.
"I think there are members on both sides of the aisle that want this debate to be public and want to talk about it," Richardville said, suggesting a hearing could be held in November.
Also Tuesday, Democrats announced planned legislation to require employers to give information to employees and prospective workers about insurance coverage for contraceptives in after the U.S. Supreme Court's Hobby Lobby decision that businesses with religious objections can opt out of paying for birth control.
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