Ax the Tax Coalition
As you know, the Michigan Legislature passed a 6% tax on selected services in Michigan. This was enacted at about 5 minutes to midnight and was a last-ditch effort to avoid a partial shutdown of government.
The service tax exempts sports and entertainment admissions (but not ticketing agency fees). Many, but not all, services considered to be “professional services” are included. All types of “consulting” are included and many types of “services contracts” are included.
Everyone in Michigan is going to be widely impacted by this change, which goes into effect on December 1, 2007. Thousands of state business must now become collectors of this tax from their customers and end users. A list of the taxed services is attached, however, many questions loom about who and what kinds of consulting will be included. Non-elected, non-accountable bureaucrats at the Michigan Department of the Treasury, unfortunately, will decide this, so we believe that the widest possible interpretation may be used to determine who and what will be taxed.
Many businesses, including those manufacturers key to Michigan, who stood to see their tax bill lowered through the newly structured Michigan Business Tax, are now facing, at best, the elimination of the tax savings and, at worst, an INCREASE in the amount of tax liability they have. This is a JOB-KILLER for Michigan. We spoke with manufacturers throughout this region who were looking to expand, providing much-needed jobs, only to have them shake their heads at what happened in the wee hours of October 1, 2007. They are re-thinking even existing investments in Michigan.
The Saginaw County Chamber of Commerce met, along with about 50 Chambers of Commerce, business associations and multi-client firms to discuss a strategy to repeal this onerous tax. We have joined the “AX THE TAX” coalition and will be spearheading the effort in the region.
After looking at the options, and meeting with leadership from both the House and Senate, it became clear that no legislative remedy would be possible. The Speaker of the House is not interested in revisiting the issue, which was extremely contentious. The Governor stated that she was not interested in replaying this whole scenario again.
The group’s best option is to launch a ballot initiative as early as next week, when the signature sheets are expected to be ready. We need 304,000 signatures to get this repeal on the November, 2008 ballot. In addition, we will be collecting contributions to help launch the campaign.
This will be a comprehensive campaign and we expect that we will be working with other groups with similar positions on the issue, to help gather signatures and contribute the Saginaw County Chamber of Commerce’s share.
How can you help?
We will need volunteers to help collect signatures in Bay, Huron, Tuscola, Midland and Saginaw Counties.
· Write Letters to the Editor! Talk about how this tax is going to affect you and your business!
· Be willing to speak with the media – we can help! Contact Veronica Horn at (989) 757-2115.
· Contribute! Every dollar helps the AX THE TAX Coalition run an effective campaign to repeal the job-killing service tax. Personal and Corporate contributions are acceptable. Make checks out to: Coalition to Ax The Tax and send them to:
Saginaw County Chamber of Commerce
515 N. Washington Ave. – Suite 200
Saginaw, MI 48607
Attn: Veronica Horn
You will be hearing much more about the AX THE TAX coalition. You can get more information at that time at: www.axthetax.com