SBT Repeal Movement Collects 360,000 Signatures

May 26, 2006

According to this article, Oakland County (Michigan) Executive Brooks Patterson has collected 360,000 signatures in his drive to put Single Business Tax (SBT) repeal measure on the ballot in Michigan.

The SBT is a unique tax. Michigan describes it as a value added tax (VAT) but the base is generally on gross receipts. If the state levied a normal corporate income tax, the rate would have to be over 15 percent (the highest in the country) to replace the revenue the SBT collects (see our Business Tax Climate Index for more on this issue). Thus, it is despised by an overwhelming majority of business owners in Michigan.

Earlier this year, the Michigan Legislature voted to repeal the SBT entirely by next year, but Governor Granholm vetoed the bill. We questioned her reasoning in this commentary.

With momentum building for SBT repeal in Michigan, the question of replacement taxes will now come to the forefront. Michigan lawmakers should be very careful on this point, lest they replace the SBT with something worse.

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