Michigan Senate Introduces Legislation to Begin Phase-Out of Personal Property Tax  

The Michigan Senate yesterday unveiled an Administration-backed proposal to immediately exempt small businesses from Michigan's burdensome business personal property tax and begin phase-out of the tax on manufacturing equipment.

This $1.2 billion tax on Michigan job providers continues to make Michigan uncompetitive for jobs - particularly among Great Lakes states - most of whom exempt this complicated and burdensome tax.

Highlights of the proposal include:

• Effective 12/31/12: Exempt small businesses with personal property under $40,000 (per jurisdiction) in taxable value. 
• Effective 12/31/15: Manufacturing property which is 10 years or older is 100% exempt. 
• Manufacturing property purchased and placed in service in Michigan after 12/31/11 would become 100% exempt on 12/31/15. 
• The proposal would be paid for (reimburse local governments) using expiring business tax credits. 
• Codify in statute the reimbursement "funds" for local governments, provide reimbursement of 100% of personal property tax revenue associated with debt, and full reimbursement for personal property tax loss to the extent it exceeds 2% of a local government's budget. 

Read an overview of the plan here. View the 8-bill package for personal property tax reform here. 

The Michigan Chamber of Commerce has been a strong advocate for substantially reducing, and eventually eliminating, the personal property tax. We believe that the tax should ultimately be eliminated for all taxpayers, but we are encouraged by this significant first step. This is the first time in the last decade that a credible plan has been proposed. The Michigan Chamber Tax Committee will be reviewing and providing technical feedback by the end of this week.   

Chamber Thanks Lawmakers Who Oppose Top-Down Mandates 

A government mandate is a government mandate. In late March, legislation establishing a new state health insurance mandate (Senate Bills 414-415) was approved by the Michigan Legislature and signed into law. The Michigan Chamber of Commerce wants to thank those lawmakers who stood with job providers by opposing top-down government mandates.

It did not go unnoticed that the same week the U.S. Supreme Court heard oral arguments on the federal mandates in Obamacare-where the Michigan Chamber filed an amicus brief along with 14 other state chambers of commerce and business organizations opposing the mandates-the Michigan Legislature voted to add additional health insurance mandates in Michigan.

Affordable health care continues to be a challenge for Michigan job providers and families. The Michigan Chamber of Commerce agrees with Speaker Jase Bolger's comments in the Detroit Free Press on March 25, 2012 on the topic of Obamacare and its mandates: "The simple truth is that there is no free lunch. These costs must be paid for. The reality is that American's have already seen their health insurance costs growing by double digits as preparations are made for the new mandates."

Governmental intervention in purchasing decisions and contractual agreements is always dangerous-and costly.  By opening the Pandora's Box with the autism mandate, proponents of other health insurance mandates see clear indications that lawmakers are willing to pick winners and losers in the battle special treatment under Michigan's insurance laws. 

Other mandates in line for possible legislative approval include special coverage for oral chemotherapy drugs, mental health and substance abuse disorders, contraceptions, infertility treatments and pap smears. However well intended, each of these mandates only serves to increase the cost of health insurance, regardless of whether the purchasers needs or wants the special coverage.   
 
We recognize, and have expressed to lawmakers, that our members fail to understand how the top-down government mandates in SBs 414-415 are any different from any of the government mandates in Obamacare. Furthermore, approval on SBs 414-415 runs contrary to many of the efforts made this legislative session to limit special treatment, reduce governmental interference in workplace decisions and eliminate big government mandates.