Bills Make Cities Whole Tax from Business Tax Cut

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LANSING, Mich. (AP) -- Lt. Gov. Brian Calley, local governments and Michigan's business community are touting newly introduced legislation to ensure local budgets aren't hit when manufacturers get a tax cut in two years.

The planned phase-out of taxes on industrial machinery starts in 2016 and is already underway for small businesses with equipment. The tax cuts will be halted, however, if a statewide vote fails in August.

Bills introduced Tuesday would make sure municipalities opposing lost revenue are kept whole. Replacement revenue would come in part from dedicating more of Michigan's use tax on out-of-state purchases to municipalities.

Critics say Michigan's personal property tax discourages business investment and is a compliance headache.

The Senate plans to approve the bipartisan legislation next week. Legislators want to finalize the bills by the end of March.

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