Michigan Business Tax's death was great for Meijer, right? Not quite
MACKINAC ISLAND—The Michigan Business Tax is dead and the general consensus — even among critics of Gov. Rick Snyder, who successfully pursued the tax's replacement — is that it'll boost Michigan businesses.
But the effect of replacing the MBT with a flat 6 percent corporate income tax that exempts 95,000 small businesses is not evenly applied among all companies.
Take Michigan-based grocery store chain Meijer Inc., for example.
Meijer President Mark Murray said today at the Detroit Regional Chamber's annual Mackinac Policy Conference that his company would probably incur a slight increase in its business taxes due to the changes.
But he's not complaining. He said that Meijer, which operates about 100 stores in Michigan, supports Snyder's tax reforms because it simplifies the system and eliminates double taxation on small business owners.
Murray's comments illuminate a widely-overlooked truism of Michigan's business tax reform: Financially, it benefits small businesses much more than big companies.
All companies will benefit from the fact that Michigan's business tax system is now substantially easier to navigate. But small business owners are more likely to benefit financially. Most small business owners will now pay taxes only through their personal tax returns, where they are taxed at the flat personal income tax rate of 4.35 percent.
Even though the new system favors small businesses, Murray said he's not complaining. He's particularly happy that the state finally eliminated its item pricing law, which previously required retailers to place a price sticker on virtually all products for sale.
"It was not causing chaos in Indiana, or Ohio, or any of the other states that don’t have item pricing," Murray said. "It just makes us all that much more efficient for consumers."
Murray said he wants Lansing lawmakers to improve the state's K-12 and higher education systems and foster more intergovernmental cooperation. He said he's happy that the Legislature — which is controlled by Republicans — is dealing with big issues.
"They spent two years debating whether we could have smoking in cigar bars. What kind of nonsense is that?" he said. "Now they're working on real stuff."