New Services Tax Being Pushed By Governor

As NFIB and other business groups continue to fight for a balanced budget without tax increases, the governor is trying to line up support for a new services tax proposal. After a line item veto from the school aid budget directed at specific school districts, the governor began to campaign around the state for more revenue in the form of tax hikes or a new services tax.

Legislation introduced by Representative Mark Meadows (D-East Lansing) would lower the sales tax rate to 5 percent and expand the tax to services. Under the proposal, business to business transactions would be exempted and almost all of the new revenue would be dedicated school funding and revenue sharing. The 22 percent surcharge on the Michigan Business Tax would also be eliminated.

NFIB has already made it clear to lawmakers that there is no support for this proposal from small business.