If so, be aware when filing for the 2006 tax year that the state is allowing a 15 percent SBT credit for taxes paid in industrial personal property.  Businesses can claim the refund credit when completing their year-end taxes.

This is being offered by the state as a thank-you for doing business in Michigan.

This credit was to be offered for years-2006 to 2009- but legislators repealed the SBT this summer, and it will sunset the end of 2007.  However, the state has declared it will honor this 15 percent credit through 2009 on whatever taxing program replaces the SBT.

That is the question.

What tax will replace the SBT and the $1.8 billion it generated?

Through a bi-partisan task force, the legislature has been working on the issue of tax reform.  The group is expected to issue a report by Dec. 1.

In addition, the Michigan chamber and Grand Rapids Chamber of Commerce are both issuing recommendations for a replacement tax.

The Michigan chamber is basing its proposal on four guidelines.  The tax should be: 1) broad-based with low rate; 2) a net tax reduction; 3) simple to administer; and 4) similar to other states.

They believe this can be achieved with a combination of a business income tax and a business license tax.  This combination, low-rate system provides a method to reflect both a company’s business activity and its ability to pay.

The Grand Rapids Chamber plan would eliminate the state’s personal property tax and replace both taxes with a new business levy called the “business activities tax” of 0.75 percent.  Businesses with less than $350,000 in gross revenue would pay an annual flat fee of $150 instead of the activities tax.

While there are varying solutions to consider, I think the majority of us can agree the replacement tax needs to be more business friendly.