LANSING, Mich. — State Sen. Jon Bumstead on Tuesday introduced tax cut legislation to provide relief for owners of small to medium-sized businesses by keeping Michigan’s business tax rate competitive with other states.
“This business tax reduction is not designed for those who didn’t ask for it or for those who don’t need it,” said Bumstead, R-Newaygo. “It is a tax cut designed to help businesses on the main streets of our communities that are still struggling to keep their doors open.”
Senate Bill 392 would provide income tax relief for businesses by lowering the current tax rate of 6% to 4.9% by 2022. Many states in the region and across the nation have already lowered their tax rates. Kentucky’s tax rate is currently 5%, and Indiana previously lowered their rate to 5.25%, and by July 1, 2021, their tax rate will decrease again to 4.9%.
“I believe it is important that we do all we can legislatively to help local businesses stay open and keep great-paying jobs in Michigan,” Bumstead said. “The COVID-19 pandemic has been an economically challenging time, and I don’t want to see Michigan lose good jobs and good people to neighboring states with a lower tax rate. Lowering the tax rate to 4.9% makes Michigan competitive with neighboring states and states across the nation.”
SB 392 is part of a larger effort by Senate Republicans to provide tax relief for families and businesses. SB 393 would also provide property tax relief for businesses, and SB 378 would increase the qualified child tax credit for families.
“Providing tax relief for families and businesses is the most direct way we can help everyone who is still struggling due to the pandemic,” said Bumstead. “Fewer taxes means more competition, and greater competition will ultimately help increase the wages and benefits of workers across the state.”
All three bills have been referred to the Senate Committee on Finance for further consideration.