Gaylord/Otsego County Chamber of Commerce

Government Relations Update from Jamie Callahan

June 2, 2008

Does Your Business Qualify for the MBT Small Business Credit?

After two northern Michigan hearings on the impact of the new MBT and surcharge on job providers, it became evident that many businesses and accounting firms may not be fully aware of the MBT Small Business Credit.

This is a credit that is factored into the MBT for smaller businesses, and many times brings a company’s tax liability more in line with their previous liability under the SBT.

There are three benchmarks that must be met for a company to likely qualify for the small business credit.All three of the criteria must be met to receive the credit, which are:

1. Gross receipts, usually total sales, must be less than $20 million and

2. Officer(s) or owners(s) compensation and director(s) fees must be under $180,000 (including partners in a partnership and members of an LLC), and

3. Adjusted business income must be less than $1.3 million

Businesses should discuss this option with their tax preparers as a possible alternative to the increased rates many northern Michigan businesses have seen with the new MBT.

Funding for Ergonomics Boards Stripped From Budget

Last week, the Senate passed the Department of Labor and Economic Growth (DLEG) budget, removing $11,000 in funding for the operation of the two Michigan Occupational Safety and Health Act (MIOSHA) boards charged with promulgating state-specific ergonomics rules.

The “work in progress ergonomics rules” are more stringent than Federal guidelines and would create an undue burden upon business to comply with this mandate.These regulations would make Michigan the state with the strictest standards and only the second state in the country to have state specific ergonomic rules (California is the other).

The bill now goes back to the House for consideration, where it is hopeful the House will agree with this budget change.

Chamber Alliance Heads Descend Upon Capitol

Presidents of the Northwest Michigan Chamber Alliance descended upon Lansing to meet with regional and statewide officials and express the importance of northern Michigan business to the Michigan economy.

Alliance presidents along with the Cadillac Public Schools superintendent met with eight members of the northern Michigan delegation from the House and Senate, along with the Speaker of the House, and Representatives serving on taxation, energy, and environment committees.A marathon budget day and a funeral prevented the group from meeting with the Senate Majority Leader and Lt. Governor as planned, so the group met with their surrogates.

The meetings included discussions on the impact the MBT and the additional surcharge are having upon the businesses in the region, along with the concern of government over-regulation and mandates upon businesses.The meetings with statewide leaders were to also establish relationships between the Alliance chambers and the legislative leaders, while reminding them that northern Michigan is a key component to the economic success of our state.