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Tax Policy Ponders Biz Tax Relief For PPE

September 22, 2020

Michigan business owners would see sales tax and income tax relief from the extra expense of buying personal protection equipment in the COVID-19 world, under legislation taken up in the House Tax Policy Committee Tuesday morning.

HB 6033, HB 6034 and HB 6035 – sponsored by Reps Michael Webber (R-Rochester Hills), Jim Lilly (R-Park Twp.), and Joe Tate (D-Detroit) – would require businesses to have a COVID-19 safety protocol plan.” 
 
The plan would also have to be consistent with “best practices for infection prevention and industrial hygiene” and “promote remote work to the fullest extent possible, including but not limited to, increasing the number of telework-eligible employees.”  
 
Webber said the bill package came to light during conversations he had with the Detroit Regional Chamber of Commerce.  
 
“We all know the challenges that small business continues to face in COVID-19,” he said. “The added expense of providing PPE is an unplanned expense.” 
 
Substitutes to the bill adopted Tuesday in committee, but not reported out, would apply the credits retroactively to March, the beginning of the pandemic. The new substitutes would also sunset the tax relief in September 2021.  
 
The new substitutes also alter the original bills in that the Department of Treasury would not be required to approve the safety plans called for in the bills. They also include language to specify that plexiglass barrier material would be a covered expense.  
 
During the roughly 30-minute meeting, it became clear that a number of questions remain about the fiscal impact of the three-bill package as well as how the credits would be handled not only going forward but if applied retroactively.  
 
Rachel Richards, lobbyist for the Department of Treasury said the department is opposed to the bill, but they’re willing to talk with the sponsors and stakeholders to see if their concerns can be addressed.  
 
When asked if the bills did advance, how the state would provide retroactive refunds for PPE purchases, Richards was frank.  
 
“That currently is something we’re looking at in terms of the language,” she added. “The language as drafted is a little problematic. We’re looking at that to see how that would work.” 

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