The Michigan Legislature has been busy during the Fall Session, including passing the budget in late September. The legislature will recess for Thanksgiving break during the weeks of November 15 and 22nd, returning for an addition two or three weeks in December. Here is a re-cap of legislation NFIB is tracking.
► Assistance for Businesses Affected by COVID-19 Government Closures
NFIB continues to push for funding for those businesses most affected by government closures and restrictions over the past 18 months. Unfortunately, several pieces of bipartisan legislation that would help these struggling businesses have been vetoed again and again by Governor Whitmer. Republican Legislative Leadership continues to try and work with the Governor to find a way to help small businesses. Stay tuned.
► Carry Back Net Loss Operating Deductions for Pass-through Entities
NFIB is supporting HB 4879, introduced by Rep. Diana Farrington (R-30), that would reflect a change in federal statute as outlined in the 2020 CARES Act and would allow pass-through entities to deduct carryback net operating losses within 5 preceding years from taxable years 2018, 2019, and 2020 from their corporate income tax. Currently under Michigan statute this deduction is prohibited.
In the 2017 Tax Cuts and Jobs Act, NOLs were prohibited from being carried back or forward (except for some insurance and farming related entities.) However, the 2020 CARES Act temporarily suspended that provision for tax years 2018, 2019, and 2020 so that a larger amount of NOLs could be deducted in response to COVID. This bill would conform Michigan’s law to match that of federal statute.
HB 4879 has had one hearing in House Tax Policy and remains in the committee.
►Personal Property Tax as it Pertains to Remote Work Due to COVID
NFIB is supporting SB 698, sponsored by Senator Runestad (R-15), that would amend the General Property Tax Act for those companies that are not exempt from personal property tax, to assess personal property for a company being used for remote work due to COVID-19 is located at the company on “tax day,” December 31, 2021.
People working remotely are using laptops, monitors, and other equipment owned by the company. This complicates the tracking personal property and paying the tax, as it is taxed based on its location on “tax day” each year, December 31. It is administratively difficult to track the location of the equipment and file all of the tax forms for property in whatever communities their workers happen to live.
Last year, the legislature passed Senate Bill 1203 (Runestad), PA 352 of 2020, to solve the issue for one year. This bill would extend the provision for an additional year.
SB 698 passed unanimously out of Senate Finance Committee and is currently waiting for a vote in the full Senate. A vote is anticipated this week or next week.
►Ensure Background Check Information is Available
NFIB is supporting HB 5368 introduced by Rep. Graham Filler (R-93), a bill needed to prevent the proposed rule (ADM 2020-26) issued by the Michigan Supreme Court, from going into effect on January 1, 2022. This rule will prevent personal identifying information (PII) to be part of publicly accessible records. PII includes date of birth, social security number, national identification number, driver’s license number and other similar items.
Verifying criminal background checks with court records is a key step in delivering accurate background checks. Without this legislation, employers will be unable to get the information crucial to keeping their business and customers safe.
As of this writing, HB 5368 has been voted out of the House Judiciary Committee and is currently waiting for a vote in the full House. Rep. Filler, NFIB, and other stakeholders continue to try and find a compromise with the Court so that this bill is not needed.
►Holding Employers and Claimants Harmless from Unemployment Insurance Agency Errors
NFIB supported HB 5265 sponsored by Rep. DaMoose (R-107), is bipartisan legislation that would ensure that any Unemployment Insurance payments paid out for federal programs would not have to be repaid if the unproper payment was due to the UI Agency’s error. This bill is in response to the Agency’s error in complying with federal guidelines that led to over 350,000 claimants receiving letters indicating they had to repay the benefits they received. NFIB worked to ensure that individual employer accounts and the UI Trust Fund will be held harmless due to the Agency’s mistakes.
HB 5265 is currently waiting for a vote of the full House.