Brownfield and Historic Credits Left Out of New Business Tax - Hearing This Week!

The House Tax Policy will begin testimony today and tomorrow on the new Corporate Income Tax plan – HB 4361 and 4362.

These bills are the Governor’s proposal to scrap the old Michigan Business Tax and create a new 6% Corporate Income Tax on certain businesses.  The big issue for League members, though, is that this plan does NOT retain the Brownfield Credits and Historic Credits that have existed in previous business taxes. It also doesn’t include MEGA credits. The plan ensures that those already granted will be honored, but doesn’t allow for any new ones.  Instead, there is a one-time appropriation being recommended by the Governor of $50 million. And, in anticipation of this becoming law, the MEDC has stopped approving any credits.

This is a tremendous problem for communities.  Many projects are dependent on these credits so that the development or redevelopment can happen. Michigan has one of the country’s best Brownfield programs.  The Brownfield along with the Historic credits have leveraged tremendous private development, have allowed for community revitalization, and have created necessary jobs (especially small business jobs) in Michigan communities.

The League believes that these credits need to be re-inserted into the law. The appropriation causes problems because it is up-front instead of after the job is created, cannot be leveraged with banks for financing, and is not nearly enough money for the amount of projects needed.

I will be testifying in committee today along with several League members and developers. The League is working with the National Brownfield Association, the Michigan Historical Preservation Network, CEDAM, and other groups to retain these credits. Please contact your legislators and the members of the House Tax Policy Committee. Click here for the League’s action alert to assist you with this effort. 

Also, we are collecting success projects in communities using these tools.  Please email any information on successful projects to Andy Schor at aschor@mml.org.

Andy Schor is the Assistant Director of State Affairs for the Michigan Municipal League. Contact him at (517) 908-0300 or by email at aschor@mml.org.