Since the repeal of the Michigan Single Business Tax (SBT), the $1.9 billion dollar question in Lansing for the last six months has been, “What’s next?” Never in the past thirty years has taxation been featured almost daily in every major newspaper and morning drive program in the state.
No less than seven SBT replacements were introduced in Michigan, and for the construction industry, the stakes were high. Ultimately these plans were narrowed to just a House Plan and a Senate Plan. From there the administration and legislature began to work on agreeing to a plan.
For the construction industry this initially resulted in a major component of the bill being seriously flawed and placed an unrealistic and costly tax burden on the Michigan construction industry.
The concern was that both a general contractor and a subcontractor would be taxed for services being performed exclusively by a subcontractor. This would have resulted in the same tax liability being TWICE levied and TWICE collected for significant portions of a SINGLE project, first to a subcontractor and secondly to a general contractor. Whenever a subcontractor would contract out a portion of a job, the result would have been TRIPLE taxation, and so on.
During the course of this debate, ABC of Michigan consulted with our statewide membership, CPAs and other business groups. We testified in front of legislative committees, met with ranking lawmakers, formed coalitions, distributed memos and position papers and worked tirelessly to advocate for a fair and equitable business tax replacement. At the end of the day, however, it was our membership who helped get us across the finish line to correct this serious flaw.
Being given less than a week to work to correct this problem, ABC turned to our greatest asset: Our membership. ABC asked our membership to get active and contact key lawmakers and the governor with personal appeals. The result was unprecedented.
In just a few days over 1000 emails from ABC of Michigan members flooded Lansing urging swift action to ensure that the new Michigan Business Tax (MBT) treats contractors fairly. Finally, on June 28, after months of hard work the MBT was adopted by the legislature. Among the final changes were resolving the concerns of ABC and the construction industry. The result is a major victory for each and every ABC member and one which couldn’t have been possible without so many dedicated members getting involved.
ABC of Michigan also extends our many thanks to members of the Legislature, Administration and staff who worked with us and who acted diligently to ensure that builders and contractors end up being treated fairly under the MBT. Your efforts are greatly appreciated.
The state of Michigan has launched a new website that identifies those contractors and subcontractors who have violated the state’s Prevailing Wage Act. The Wage & Hour Division of the Michigan Department of Labor & Economic Growth (DLEG) developed the site for contracting agents, who award construction contracts for public schools, community colleges, and universities and other state-fund construction projects.
The listing, which will be updated monthly, includes the names and addresses of contractors and subcontractors the division has found in violation of Michigan’s prevailing wage law based on complaints from individuals and third parties.
Michigan's Prevailing Wage law covers construction workers employed on state financed or sponsored construction projects. Under the act, the Wage and Hour Division establishes wage and fringe benefit rates to be paid construction workers on state projects. The division only surveys labor organizations throughout the state for wage, overtime and fringe benefit information. It then uses the information to establish the prevailing rates for all construction classifications by county.
To further aid contracting agents working with information about the state’s Prevailing Wage Act, the Wage & Hour Division will be holding forums in four locations around the state this summer. The forums will be held on June 27 in Traverse City, 701 S. Elmwood, 3rd floor conference room, 1:00 – 4:00 p.m.; on July 19 in Grand Rapids, 350 Ottawa, NW, Michigan Room, 9:00 a.m. to noon; on July 26 in Flint, 125 E. Union, 7th floor conference room, 9:00 a.m. to noon; and on July 31 in Detroit, Cadillac Place, 3024 W. Grand Blvd., Room L-500, 1:00 – 4:00 p.m. Those interested in attending a session should contact Sue Shelton with the Wage & Hour Division at (517) 335-0987.