New Tax Good For Small Business

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In what many organizations hope is a final replacement for the Single Business Tax, the new Michigan Business Tax could help to bring economic development to Michigan. That's something the SBT didn't do.

"Everytime a job employer added a new employee they were taxed on that. Moving away from that in and of itself would be an improvement over the SBT," said Tricia Kinley of the Michigan Chamber of Commerce.

The details have yet to be finalized but the new plan will most likely have two components. The first, an income tax which reflects a business' ability to pay. The second is based on gross receipts, or the amount of goods bought and sold.

This new plan is expected to offer some type of tax relief to many industries across Michigan. That's something officials at the Chamber of Commerce are hoping will lure business into the state.

"This is a plan that attracts people, companies to comes to Michigan and encourages people who are here to grow their business here," Kinley said.

Simply put, tax incentives to expand. That's good news for small business owners.

"Right now, we're quite pleased," said Todd Anderson.

Anderson works for the Small Business Association of Michigan. He believes the proposal could spark Michigan's economy.

"It should help some small businesses not feel the heavy weight of the government before they are starting to make a profit," he said.

It will also reduce the amount they pay. Under the SBT small businesses paid about 2% to the government. That rate will drop to 1.8%.

While Michigan businesses will receive tax credit for hiring Michigan employees, there will be some left behind in the deal.

"The biggest losers out of this plan are out-of-state companies," Anderson said.

Something lawmakers hope will encourage them to move into the Great Lakes State.

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