Help Fight the Service Tax

As you are aware, in the final 24 hours of the state budget deadline, state lawmakers passed — and the Governor signed into law — a major expansion of the sales tax to approximately 60 new services. There was no public hearing or opportunity to comment. The passage of this legislation has created anger and confusion among Michigan job providers. The Michigan Chamber of Commerce is strongly opposed to this $736 million tax increase on families and job providers. This legislation is poorly-drafted, to say the least, and would have an extremely damaging impact on Michigan's economy.

A growing coalition of 39 business organizations has been formed to support repeal of the service tax. The name of the group is the Coalition to Ax the Tax. The goal of the coalition is to get the service tax repealed before it goes into effect on December 1, 2007. If that effort fails, the coalition will seek to put a repeal on the November 2008 statewide ballot. The Michigan Chamber is a member of the coalition.  to learn more about the coalition and its members.

A policy brief developed by the Mackinac Center for Public Policy shows how the state can address its budget needs through 55 specific cost-cutting measures, instead of tax increases. to access the brief.

Currently, there are four bills you should be aware of concerning the service tax. Three bills have been introduced to repeal the service tax. They are: Senate Bill 824 (Brown), Senate Bill 838 (Cassis) and House Bill 5280 (Acciavatti). The fourth bill, House Bill 5198 (Tobocman), is the bill that imposes the service tax. Both the House Fiscal Agency and the Senate Fiscal Agency have analyzed the financial impact of HB 5198.  to access the House Fiscal Agency analysis.  to access the Senate Fiscal Agency Analysis.

Commentary by Tricia Kinley, Director of Tax Policy & Economic Development for the Michigan Chamber, was recently published in The Detroit News. This commentary provides good talking points on why the service tax should be repealed.  to access her commentary.

Should you have any questions regarding the service tax, please feel free to contact Tricia Kinley or Rich Studley, Executive Vice President of the Michigan Chamber, at 517-371-2100.