Sen. Cassis bill to help freight transportation firms approved
by Senate panel

“Cascading has resulted in tax increases on the freight industry of more than 300 percent, making it worse than the onerous surcharge,” said Cassis, R-Novi. “We must bring fairness to job providers or risk seeing them leave the state or close up shop and lay off workers. This is an economic development bill that will create real jobs.”

Senate Bill 1222 would allow certain logistic firms to deduct payments made to subcontractors to transport freight by motor vehicle from the gross receipts base of the MBT. “These payments are simply a pass-through to the subcontractors and not a profit to the company,” said Cassis.

Lisa Russo and Fred Schlemmer of Steel Pro, headquartered in Wayne, Mich., testified in support of the bill and told the panel that the MBT has increased their tax liability 330 percent. They said that Cassis’ measure would reduce that increase to 180 percent, which is still more than their former single business tax liability. However, the reduction would allow them to use the savings to invest in a $5 million expansion.

“The first step to turning around our economy and creating jobs is doing all we can to support the home team by enabling them to stay and grow here in Michigan,” Cassis said. “The $7 million short-term impact of this change will be more than made up by the new revenue to the state as these job providers expand and hire new workers. It is a fair, common-sense solution to help long-time Michigan taxpayers, and I am glad it received bipartisan support.”

Several freight transportation and logistic firms, including Dearborn Steel Express and O & I Transport, Inc., testified or sent letters to the committee supporting the legislation.

SB 1222 was approved 6-0 by the panel and now heads to the full Senate for consideration.