The Single Business Tax is closer to meeting its doom, as a ballot initiative that would repeal it has been approved by the Board of State Canvassers.
Members of the organization Repeal The Single Business Tax, or Repeal SBT, which includes Oakland County Executive L. Brooks Patterson, had enough of its 372,755 signatures approved by the board on July 28.
The state Legislature can now put the issue up for a vote and is expected to do so Aug. 9.
The tax, according to the Michigan Department of Treasury, is the only "general business tax" levied by the state. Created in 1976, it replaced several business taxes.
"We needed to help businesses and attract them to Michigan by repealing the tax, which was set to expire in 2009 anyway," said Jennifer Shoha, a spokeswoman for Repeal SBT. "We wanted to move the timetable up to start economic growth."
The Legislature is expected to vote to repeal the tax when it meets on Aug. 9.
In a press release, Speaker of the House of Representatives Craig DeRoche, R-Novi, said eliminating the tax will help the state and businesses.
"Tens of thousands of people put their names on the petition, and business groups across the state have come out in strong support of repealing the SBT because they recognize it is a job killer," DeRoche said. "With the SBT out of the way, the important work can begin to find a better, fairer and job-friendly business tax for Michigan, the important reform we need to turn our economy around."
But opposition to the proposal centers around arguments saying there needs to be a replacement source of revenue for the state if the tax is eliminated.
Sen. Gretchen Whitmer, D-Lansing, said she won't vote to eliminate the tax because there isn't a plan to replace it, which constitutes a quarter of the state's general fund. That money, she said, funds universities and health care.
"We need to make our state as business-friendly as possible," Whitmer said. "But it's irresponsible to do away with a quarter of the state's budget without a plan to replace it."
Whitmer said she supports a plan to restructure the state's tax system, but won't vote to eliminate the Single Business Tax until there's something to replace it.
"There's been a lot of talk and a lot of plans, but there's no set plan, and they're talking about doing it later," Whitmer said.
"It's terrible public policy to create a problem and tell everyone to wait for a solution."
Supporters of the ballot initiative, including the Michigan Chamber of Commerce, argue that the tax hurts businesses by burdening them with costs, and also because a large part of the tax base under the Single Business Tax is wages and benefits, businesses are discouraged from hiring more employees.
"We receive a lot of negative feedback that it's very burdensome and complicated," said Rich Studley, executive vice president of the chamber. "It has been a deterrent to job creation. Repealing the Single Business Tax and replacing it with a tax that's more simple will be very helpful."
