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September 13, 2005State groups wrangle over Single Business Tax overhaulByRecord-Eagle business editor TRAVERSE CITY - Two of Lansing's top business lobbyists expect state lawmakers to hammer out a new Single Business Tax plan by year's end - although it's not clear what changes it will include. Representatives of the Michigan Manufacturers Association and the state Chamber of Commerce debated the dueling SBT overhauls under review in Lansing at a forum sponsored by chamber offices in Traverse City, Cadillac and Petoskey. The state's manufacturing sector backs Gov. Jennifer Granholm's proposal to roll back the SBT tax on manufacturers and shift more burden to financial and service industries. "Manufacturers pay the lion's share of taxes in the state," said Michael Johnston, director of regulatory affairs for the Michigan Manufacturers Association. "(SBT) is an unfair and unbalanced tax." Granholm's proposal, known as the Michigan Jobs and Investment Act, would cut the standard SBT rate from 1.9 to 1.2 percent, and the small business rate from 2 to 1.2 percent. It would create a 35 percent personal property tax credit for manufacturing and research and development properties, eliminate several SBT deductions and increase the tax on insurance premiums to two percent. The state chamber opposes the changes, saying it will result in higher taxes for thousands of Michigan companies. "(It provides) cuts for some at the expense of others," said Tricia Kinley, of the Michigan Chamber of Commerce. The Granholm administration estimates more than 71,000 Michigan businesses would get a tax cut under the proposal. They include more than 32,000 small businesses and around 8,600 manufacturing firms eligible for a personal property tax credit. But the state chamber says the governor's plan will result in "substantial" tax increases for 25,000 Michigan businesses.
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