WDET News
- Legislature Repeals Services Tax
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Dec 1, 2007State Capitol
The state House repealed Michigan’s new tax on services that took effect at midnight Saturday. The state Senate voted early Saturday morning to scrap the tax following weeks of hard-fought negotiations between Republicans and Democrats.
Business groups rose up in protest against the tax after it was
approved as part of a quickly drafted plan to balance the budget and end
the October first state government shutdown. Businesses say the tax
would have been unfair to many companies and would have forced thousands
of jobs out of the state. Representative Steve Bieda (BEE’-duh) chairs the House Tax Policy Committee.
"We are up against the clock with the services tax going into effect today, I think the business community spoke very loud and clear, and I think there were some unintended consequences to the services tax that needed to be addressed."
The state is promising it won’t punish companies that don’t collect
the tax this weekend. Instead of taxing services, the state will charge more to many companies that pay the Michigan Business Tax. Governor Granholm said the deal to eliminate the tax could not force cuts in services such as
schools, aid to local governments, and health care.