Michigan Governor Jennifer Granholm announced last week she is ready to abolish the dreaded Single Business Tax (SBT), Michigan’s altered version of a value added taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. . While this is definitely a positive development for Michigan businesses, the move comes too late for many as the SBT has been hurting businesses in Michigan for years. Governor Grnaholm vetoed legislation to repeal the SBT earlier this year. Governor Granholm is now bowing to pressure from businesses and Oakland Country executive Brooks Patterson who collected 360,000 signatures in support of SBT repeal.
The Tax Foundation ranks the SBT as the 2nd worst corporate tax system in the country, ahead of only New Jersey’s woeful corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. system, in the 2006 State Business Tax Climate Index. See additional commentaries from the Tax Foundation on the SBT and here, here and here. See this informative article to learn more about the SBT.
The Michigan legislature has set to work to replace the SBT, spurred by Patterson’s signature gathering which forces them to action. Michigan lawmakers would be well served to focus less on replacing the lost revenue SBT repeal would create and concentrate on helping Michigan businesses by taking the albatross that is the SBT off their back
Share