Incentives Bills Reported by Senate Committee
The Senate Committee on Development and International Investment reported the three bills called “The Good Jobs for Michigan” package on Thursday, 3/23/17, that would create a new economic development tool for the MEDC.
Below are links to the three-bill package:
The package would create provide a fund capped at $250 million to attract larger projects. The program eligible companies to capture the income tax revenue of the jobs they create. Eligibility requirements include creating a minimum of 500 jobs, that pay at least the average wage within the local prosperity region, which would allow a 50% capture of the income tax of the new jobs for up to 5 years. For projects that pay 125% of the average wage within the local prosperity region, and create 250 jobs, the capture rate would be up to 100% and up to 10 years.
The bills now move to the full Senate for consideration.
State Income Tax Elimination Bills Introduced in House and Senate
New legislation to cut Michigan’s current 4.25 percent income tax rate and eventually eliminate it altogether has been introduced in both chambers of the Legislature.
Senate Bill 4 (Senator Jack Brandenburg, R-Harrison Twp.) and House Bill 4001 (Representative Lee Chatfield, R-Levering), would both reduce the state’s current 4.25 percent rate to 3.9 in 2018 and initiate a phase-out of the tax by reducing the rate 0.1 each year until the rate is zero.
The Senate version is a five-year plan which would reduce the rate to 4 percent in the first year and reduce it an additional 1 percent over the next four years.
“It always helps the state economically when you leave more money in peoples’ pockets rather than taking it through taxes. People are spenders, not savers,” said Brandenburg. “If you give them money to spend, they will spend it. That means businesses can be expanded and business expansion spells jobs.”
The MMA Tax Policy Committee has not yet reviewed these legislation and so has not taken a position on the bills.
Call MMA’s Mike Johnston, at 517-487-8554 or email@example.com, with any questions or for more details.