Outline of "Repeal Single Business Tax" Initiated Law
January 15, 2017 October 1, 2020 Featured - Expertise, Featured - Homepage, PA-Public Policy and Economic Analysis, PT-Reports
In early 2006, Anderson Economic Group was retained by L. Brooks Patterson and the campaign committee titled "Repeal SBT," to draft an initiated law that would repeal the Michigan's decades-old Single Business Tax, which had gross revenue of approximately $2 billion. The SBT was the only value-added tax in the US, and had become riddled with special provisions and alternate tax calculations. It was widely derided as the "small business tax" because such enterprises were often required to pay tax even when unprofitable, and were not the intended beneficiaries of many special provisions.
Patrick Anderson drafted an initiated law to repeal the tax, affirm existing tax obligations, and provide for a transition to new tax structure. The March, 2006 memo outlines the statutory language, proposed ballot description, purpose of specific provisions, effective date of repeal, and transition issues related to the payment of taxes by businesses.
The ballot committee relied upon this language, and circulated petitions that were signed by over 291,000 citizens. Under the Michigan Constitution, this placed the initiated law before the legislature for adoption or rejection, and to the voters if the legislature failed to adopt it. Both houses of the Michigan legislature passed the initiated law in August 2006, and it became Public Act 325 of 2006.
The publication available here contains the original March 2006 memo, and the codified law.
The Tax Burdens of The Michigan Single Business Tax
2007 State Business Tax Burden Rankings
business, Michigan, policy, taxes