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New Michigan Plan May Replace Service Tax

LANSING, Mich. — The Michigan Senate voted today to replace a proposed sales tax on services such as drycleaning set to take effect on Dec. 1. Approved 20-16, the Republican plan would replace the unpopular proposal an increase in the new Michigan Business Tax, or MBT.
The Senate plan seeks to impose a smaller MBT surcharge on all businesses temporarily, and would limit any single business’ liability to $7.5 million. An earlier House version set the limit at $2 million, giving big businesses a bigger break.
The Democratic-controlled Michigan State House doesn’t return until November 26. Legislators are racing to reach a compromise before Dec. 1, when the service tax is set to take effect.
Gov. Granholm’s service tax plan has businesses in an uproar, but has some support among policy analysts. The Michigan Institute of Laundering & Drycleaning (MILD) has joined an “Ax The Tax” coalition to fight the battle.

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