Michigan House votes to avert $1.1B loss
Lansing — Michigan would keep an estimated $1.1 billion it is at risk of being forced to refund to out-of-state companies under a bill approved Tuesday by the House, which moved quickly to insulate the state from a potentially budget-busting court decision.
On lawmakers’ first day of a four-week session before the November election, the House voted 100-10 to send the legislation to the Senate, whose Republican leader vowed final approval by the end of September.
The bill would limit a July state Supreme Court ruling so a $6 million refund owed to IBM is not extended to 134 similar tax cases involving non-Michigan businesses. Gov. Rick Snyder’s administration has warned it could cost $1.1 billion, plus interest, mostly in the fiscal year that will start in October.
The Attorney General’s Office, representing the state Treasury Department, has asked the high court to reconsider its 4-3 ruling. Majority Republicans said the House decided to act Tuesday so the state is prepared in case the Supreme Court declines to change its mind.
“Nobody in their right mind would have put together a piece of tax legislation to benefit out-of-state companies versus our own Michigan companies,” said House Appropriations Committee Chairman Joe Haveman, R-Holland.
At issue in the ruling were Michigan’s 2007 and 2011 business tax overhauls and their impact on out-of-state corporations, which argue they should be able to use an older formula that effectively kept their tax bills lower. The high court overruled two lower courts who ruled for the state.
“With all due respect to the rule-of-law courts, I think they missed this one. So I would very strongly intend to clarify the misconceptions of … the Michigan Business Tax rewrite,” said Senate Majority Leader Randy Richardville, R-Monroe.