Traverse City Record-Eagle

Archive: Sunday

April 6, 2014

Tax cut headed to the voters

TRAVERSE CITY — Sparks flew as welder Keith Newstead finished his work on a new tailgate at Stromberg Carlson Products off Hammond Road.

Newstead’s co-worker, Lacey Buck, labored about 15 yards away. She carefully placed a tubular piece of aluminum on a sanding machine for scraping so it could be painted, then morphed into a handrail for seniors to use to climb in and out of recreational vehicles.

Both workers at the assembly and manufacturing shop in Grand Traverse County need equipment to do their jobs, equipment which, in the state of Michigan, is taxed. The state’s personal property tax on business puts a levy on everything from office furniture to computers and the type of heavy equipment used at Stromberg Carlson, prompting business owner Bob Brammer Jr. to say it’s time to cut the tax.

“Honestly, I don’t know,” Brammer said when asked the exact amount the Michigan personal property tax on business costs him annually. “The accountant has to do work, and that’s a problem in and of itself.”

Michigan political leaders agree with Brammer’s assessment that the business personal property tax isn’t working. The state Legislature passed a law last month to rollback the tax. Voters will decide in August whether to sign off on the law.

“The bottom line is this is a tax that most other states have eliminated,” said Mike Johnston, vice president of government affairs for the Michigan Manufacturing Association. “We are making Michigan more competitive.”

The rollback would be the state’s latest attempt to lighten the tax load on business. The debate over the business property tax has been contentious at times, with prior versions of a tax cut sparking significant opposition because there was no plan to replace nearly $500 million in lost revenues that are supposed to go to schools, local units of government and public safety agencies.

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