Proposal 1 to cut taxes for small businesses, manufacturers
Thu, 24 Jul 2014 00:45:06 GMT —
A final decision on a tax cut is on the horizon for small businesses and manufacturers.
Michigan lawmakers have already passed legislation to cut taxes for both groups.
Voters have the final say on Proposal 1 when they go to the polls for the primary on August 5th.
Business owners such as Terry Berden want to get rid of the personal property tax.
Every thousand dollars is important to small business, said Terry Berden, Great Lakes Stainless C.E.O.
Right now Berden pays taxes on every piece of equipment at Great Lakes Stainless, from the newest piece of machinery to the oldest.
Berden pays anywhere from 10 to 20 thousand dollars every year in personal property taxes, and has ideas about what he can do with extra funds if he didn TMt have to pay the tax.
There's many good things that we could do with $20,000. We could hire a new employee; we could buy a new piece of equipment." For some it could be the difference between staying afloat or not, and staying in business for another year or not, said Kent Wood, Traverse City Chamber of Commerce Director of Government Relations.
Wood says money raised from the personal property tax will not be replaced by taxpayers. It will come from expiring business tax credits and a yearly tax assessment for manufacturers.
Even small, small breaks or small help could mean a huge difference for them when it comes to these tight markets or competing globally.
Small businesses with less than $80,000 of assets such as furniture, computers and vehicles have not paid personal property taxes since the start of 2014.
If voters reject Proposal 1 those businesses would have to start paying personal property taxes again, and legislation already passed in Lansing would be repealed.
If Proposal 1 goes through, manufacturing businesses like Great Lakes Stainless would benefit with a phased in exemption over the next seven to ten years, and in the end will get roughly an 80 percent tax break.
Like most small businesses| it's not so unusual that we turn most of our money back into our business, said Berden.
Michigan is the only Great Lakes state that still requires the full personal property tax which generates about 1.2 billion dollars across the state per year, according to Wood.
Wood says there are no organized groups against Proposal 1.