Vote Smart's Synopsis:

Vote to concur with Senate amendments and pass a bill that replaces the service tax with an annual business surcharge.

Highlights:

- Establishes an annual 21.99 percent surcharge on the Michigan Business Tax, except for financial institutions in which the surcharge is 27.7 percent through 2008 and 23.4 percent thereafter, that begins on January 1, 2008 and expires on January 1, 2017 [Sec. 281 (1) (2)]. - Exempts insurance companies from paying the surcharge [Sec. 281 (4) (a)]. - Establishes a $6 million cap on the surcharge [Sec. 281 (3)]. - Establishes a number of tax credits an eligible taxpayer may claim against the tax imposed by this act (Secs. 403-451). - Sets the business income tax rate at 4.95 percent [Sec. 201 (1)]. - Requires a specific amount of the revenue collected by this act to be invested in the school aid fund: $341 million for the 2007-2008 fiscal year, $729 million for the 2008-2009 fiscal year, and an amount adjusted according to the growth in the U.S. consumer price index for every fiscal year thereafter [Sec. 515 (1)].

Full Bill Text

Vote Smart's Synopsis:

Vote to repeal the new tax on certain services and instead establish a surcharge on the Michigan Business Tax.

Highlights:

- Establishes an annual 21.99 percent surcharge on the Michigan Business Tax, except for financial institutions in which the surcharge is 27.7 percent through 2008 and 23.4 percent thereafter, that begins on January 1, 2008 and expires on January 1, 2017 [Sec. 281 (1) (2)]. - Exempts insurance companies from paying the surcharge [Sec. 281 (4) (a)]. - Establishes a $6 million cap on the surcharge [Sec. 281 (3)]. - Establishes a number of tax credits an eligible taxpayer may claim against the tax imposed by this act (Secs. 403-451). - Sets the business income tax rate at 4.95 percent [Sec. 201 (1)]. - Requires a specific amount of the revenue collected by this act to be invested in the school aid fund: $341 million for the 2007-2008 fiscal year, $729 million for the 2008-2009 fiscal year, and an amount adjusted according to the growth in the U.S. consumer price index for every fiscal year thereafter [Sec. 515 (1)]. - Senate Substitute (S-8) offered by Senator Gilbert on 12/01/2007.

Full Bill Text

Vote Smart's Synopsis:

Vote to replace the new sales tax on certain services with a temporary surcharge on the Michigan Business Tax.

Highlights:

- Establishes a 14 percent surcharge on Michigan Business Tax taxpayers during tax years 2008, 2009, and 2010 (Sec. 281). - Stipulates that the surcharge shall not exceed $7.50 million on any single taxpayer in any one tax year (Sec. 281). - Establishes an alternative surcharge on financial institutions of 27.7 percent for the 2008 tax year and of 23.4 percent for the 2009 and 2010 tax years, with no limitation on the amount of the surcharge (Sec. 281). - Specifies that the surcharge will not affect insurance companies (Sec. 281). - Establishes a tax credit for eligible taxpayers for expenses for additional police officers, traffic management devices, or any professional fees while hosting motor sports events (Sec. 409). - Limits certain small firms’ Michigan Business Tax liability to 1.8 percent of their adjusted business income (Sec. 417). - Authorizes $341.00 million of the revenue collected under this act to be distributed to the school aid fund in fiscal year 2007-2008, and $729.00 million to be distributed to the school aid fund in fiscal year 2008-2009, with the remainder of the revenue collected under this act going into the general fund. (Sec. 515). - Does not go into effect until SB 838, which repeals the new tax on certain services, is signed into law (Enacting Section 1).

Vote Smart's Synopsis:

Vote to repeal the new tax on certain services and instead establish a surcharge on the Michigan Business Tax.

Highlights:

- Repeals the new tax on certain services, put in place under HB 5198, immediately after it goes into effect on Dec. 1, 2007 (Enacting Section 1). - Establishes an annual surcharge on Michigan Business Tax taxpayers equal to 32.9 percent of tax liability in 2008 and 27.3 percent in 2009 and beyond (Sec. 281). - Stipulates that the surcharge shall not exceed $2 million on any single taxpayer in any one tax year (Sec. 281). - Establishes an alternative surcharge on financial institutions of 27.7 percent for the 2008 tax year and of 23.4 percent for the 2009 tax year and beyond, with no limitation on the amount of the surcharge (Sec. 281). - Specifies that the surcharge will not affect insurance companies (Sec. 281). - Authorizes $341.00 million of the revenue collected under this act to be distributed to the school aid fund in fiscal year 2007-2008, and $729.00 million to be distributed to the school aid fund in fiscal year 2008-2009, with the remainder of the revenue collected under this act going into the general fund. (Sec. 515). - Requires a rebate to taxpayers if excess revenue is generated through this act, with the rebate being distributed in the fiscal year immediately following the fiscal year of the excess (Sec. 601).

Full Bill Text