LANSING – With an expansion of the service tax set to go into effect on Dec. 1, State Representative Andy Coulouris (D-Saginaw) today called on the Republican-led Senate to act on a House plan that will repeal the 6 percent tax on services. If the Senate fails to approve the plan, which Coulouris sponsored and which was passed by the House on Nov. 8, the service tax will be effective as of Dec. 1.
"I worked quickly with business leaders and House colleagues from both sides of the aisle to respond to the business community's concerns about the impact of the service tax," Coulouris said. "Our consensus plan promotes economic growth while protecting funding for vital services in our communities, such as police and fire protection. I urge the Senate to work with us and approve this bipartisan plan to repeal the service tax before it goes into effect."
The proposed service tax expansion was created as a compromise measure in order to get a budget passed by Oct. 1 and stave off a massive government shutdown. Responding to the business community's concerns over the expansion, the Michigan House passed a plan on Nov. 8 that repeals the measure before it goes into effect on Dec. 1.
Democratic leaders worked closely with Michigan's business community and lawmakers from both parties to forge a consensus that will move Michigan's economy forward while protecting essential funding for services such as education, health care, and police and fire protection. Under the plan passed by the House, an additional surcharge will be added to the Michigan Business Tax. The plan has garnered support from businesses and organizations across the state, including the Detroit and Grand Rapids Chambers of Commerce, the Michigan Manufacturing Association, the Big Three automakers, AT&T, the Kellogg Co. and Northwest Airlines, among others.
A study released by the Detroit Regional Chamber of Commerce found that businesses could spend $14 million a day from Oct. 1 to Dec. 1 to be prepared to comply with the service tax expansion.
"The House moved swiftly to pass a repeal of the service tax expansion, and it is now up to the Senate to act before the tax goes into effect on Dec. 1," Coulouris said. "Taking action now saves businesses millions in transition costs, and I hope the Senate does the right thing by passing our legislation."