LANSING - The state House has approved legislation that eliminates the Single Business Tax in an effort to improve Michigan's climate for creating jobs and encouraging economic growth in the state.

House Bill 5743, supported by Rep. Kevin Elsenheimer, R-Bellaire, completely repeals the Single Business Tax in 2008. Elsenheimer said the effort is similar to measures taken in the mid-'90s that drastically reduced property taxes under Proposal A.

The Senate approved the measure Wednesday.

“The House has sent a message to the employers and businesses of Michigan that we recognize the Single Business Tax as an onerous tax, we recognize that we're the only state in the union that has adopted it and we're getting rid of it two years sooner,” Elsenheimer said. “Now we're going to be looking closely at how to replace this funding to make sure the state is fairly and appropriately taxing businesses. We're not doing that now, but we're well on our way by getting rid of this particular tax.”

Elsenheimer said ending the SBT provides a strong incentive for all companies to invest in Michigan, translating into more jobs and continued economic growth for residents and families.

The SBT was first enacted in 1976 and costs Michigan job providers about $1.8 billion annually. The tax is levied on businesses whose adjusted gross receipts exceed $350,000 annually.

The legislation included language which would forbid the state from replacing the revenue lost by eliminating the SBT with a general tax increase on individuals.

“We will not balance our budget on the backs of working families and consumers,” said House Speaker Craig DeRoche, R-Novi. “They've suffered enough as jobs and investment continue to leave Michigan for other states.”

DeRoche urged Gov. Granholm to sign the legislation, and work with the House and the Senate to craft a new business tax code that encourages new investment and job growth.

HB 5743 now goes to the Senate for consideration.

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