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Michigan moves to 20th in Anderson biz tax study

June 7, 2016

Article courtesy MIRS News Service

In 2014, Michigan’s business tax burden is the nation’s 20th lowest among all 50 states and the District of Columbia, according to a recently released Anderson Economic Group (AEG) study.

Michigan collected 8.4 percent of these funds for a total $14.07 billion, according to the study. Michigan has continually improved in the study’s rankings since 2011, when it was rated 32nd. Property taxes accounted for 49 percent of business taxes, general sales taxes accounted for 17 percent.

The unemployment insurance tax made up 13 percent of the tax and the corporate income tax accounted for 6 percent. The study didn’t look into the tax incentives given businesses.

The collective income taxes paid by the state’s small businesses rose from $464 million in 2011 to $702 million in 2014.

This rise can be attributed to a tax exemption the state began granting small businesses in 2012, according to a press release from the Small Business Association of Michigan (SBAM).

“This highly credible study by Anderson Economic Group . . . confirms that replacing the convoluted Michigan Business Tax in 2012 with a Corporate Income Tax was a wise decision that has helped boost small business economic performance and create jobs,” says Small Business Association of Michigan President and CEO Rob FOWLER.

“Exempting small businesses from the Corporate Income Tax removed the unfair burden of double taxation that afflicted many of them under the Single Business Tax and the Michigan Business Tax. This gave entrepreneurs more opportunity to grow, prosper and provide local employment. The report provides evidence that the small business economy has grown and small businesses are paying not only a larger amount of state income taxes but also significant amounts of sales, property and unemployment taxes.”

The study combines 11 different types of taxes in order to paint a clearer picture of the collective impact state tax policies have on businesses, according to the study.

Anderson Economic Group has been conducting the study for the past 10 years, according to the press release. The report was sponsored by the National Federation of Independent Businesses, Business Leaders for Michigan, Michigan Chamber of Commerce, Small Business Association of Michigan (SBAM), the Michigan Retailers Association and Michigan Realtors.

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