Legislation representing the tax restructuring agreement reached by Governor Rick Snyder, Senate Majority Leader Randy Richardville (R-Monroe) and House Speaker Jase Bolger (R-Marshall) passed the House of Representatives Thursday. The major bill in the package, House Bill (HB) 4361, passed the chamber on a 56-53 vote. Republican Representatives Anthony Forlini (R-Harrison Township), Ken Goike (R-Ray Township), Andrea LaFontaine (R-Richmond), Peter Lund (R-Shelby Township), Rick Outman (R-Six Lakes) and Pat Somerville (R-New Boston), joined all of the House’s 47 Democratic members in casting “no” votes. Representative Gail Haines (R-Waterford) had an excused absence for a family medical situation.
The most significant portions of the plan call for the replacement of the much-maligned Michigan Business Tax (MBT) with a 6-percent corporate income tax on C-corporations and the elimination of nearly all individual income tax exemptions and credits – including the Earned Income Tax Credit (EITC) and the exemptions provided to those collecting public and private pensions (through a three-tier plan).
Following multiple hearings before the House Committee on Tax Policy, the package, which also includes HB 4362, HB 4479, HB 4480, HB 4481, HB 4482, HB 4483 and HB 4484, moved to the House floor Wednesday with final passage achieved mid-day Thursday. Democratic members attempted multiple amendments, both during Committee and floor action, seeking to add back many of the credits removed by the package (EITC, film credits, Brownfield development, etc.).
The new tax structure represents an approximately $1.78 billion business tax cut. The package now moves to the Senate Committee on Finance where, pundits argue, the hurdle may be higher than experienced in the House.