Sen. Nancy Cassis introduces bill to provide economic stimulus for small businesses


March 7, 2008
 
LANSING - Sen. Nancy Cassis introduced bi-partisan legislation today in the Michigan Senate to help stimulate the economy by providing significant tax relief for small businesses.

The measure is designed to increase the number of job providers eligible for the alternative tax rate for small businesses and increase the number of businesses that qualify for the Michigan Entrepreneurial Credit.

"Small businesses are the heart and backbone of Michigan's economy," said Cassis, R-Novi. "They have continued to grow and create jobs despite a struggling economy and without the benefit of tax relief given to Michigan's largest companies."

The legislation is aimed at helping increase relief to a significant number of Michigan's small businesses by reducing their tax burden, encouraging investment and accelerating job creation.

Senate Bill 1198 would increase the number of small businesses that qualify for the 1.8 percent alternative tax rate by raising the income limits that currently prevent many small businesses from taking advantage of the lower tax rate. To qualify under the proposed law, owner compensation could not exceed $250,000 and their Adjusted Business Income would have to be less than $1.5 million.

The measure would also allow more "gazelles," fast-growing, innovative businesses that are investing in Michigan's economy and hiring new employees, to qualify for the ME-2 by reducing the minimum required investment to $500,000 and decreasing the number of created jobs to eight. This would put the ME-2 in line with current grants offered by the Michigan Strategic Fund.

"Governor Granholm's State of the State address encouraged the diversification of small businesses," Cassis said. "Senate Bill 1198 will accomplish that goal while providing much needed tax relief to small businesses, including minority small businesses located in urban centers. This legislation is essential to help job providers survive and grow in this struggling economy."

SB 1198 is expected to be referred to the Senate Finance Committee for consideration.