Legislative Update

Written by Forrest Wall, CAE, Staff  Vice President and Industry Relations

First House Bill Of Session: MBT Surcharge Repeal
House Bill 4001, the first bill introduced in the 2011-12 legislative session in the House of Representatives, would repeal the Michigan Business Tax (MBT) Surcharge. Business tax reform, along with balancing the state’s budget, will be the highest priorities for the new state legislature and administration. While repeal of the MBT Surcharge is desirable, the multifamily rental industry needs more significant modifications or a replacement for the MBT. As many of you know, there are multiple problems with the MBT that plague the industry. Examples include:

• The gross receipts portion of the tax does not allow apartment owners to deduct that portion of rental receipts which cover passthrough expenses (property taxes, utilities, etc).

• The large tax burden incurred on the sale of a property. This has had a dampening effect on the sale of commercial property in Michigan at the worst possible time.

• The tax liability incurred as a result of debt cancellation/foreclosure.

These issues, along with a host of others, have made business tax reform one of AAM’s top priorities. As of this writing, Governor Snyder had not formally laid out his plan for tax reform, but as he indicated during his campaign, replacement of the MBT with a simple and fair corporate income tax (depending on the rate and other details of course) would certainly be a better tax structure for the apartment industry and Michigan’s business community.

Support AAM-PAC Today
In the era of term limits, AAM’s role in educating our current and future legislators about rental housing issues has never been more important.

Some of the issues AAM will be working on in the 2011-2012 session include:

• Business Tax Reform

• Apartment Inspection Law Reform

• Opposition to Rent Control Proposals

AAM needs your help to financially support those elected officials who understand the important role of rental housing in Michigan’s economy. AAM is able to provide this financial assistance through its Political Action Committee, called AAM-PAC. Remember, AAM-PAC contributions must be made via personal, partnership, or LLP check or credit cards. Please contact me at 248-862-1004 to make your contribution today! ■

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