But will they be effective?
MARQUETTE -- After being in office for only a few months, Governor Rick Snyder proposed a tax overhaul in an effort to change the way Michigan does business...by eliminating the Michigan Business Tax and replacing it with a flat, six percent corporate income tax. The reform cleared the House and Senate yesterday, but will it work? One U.P. business owner says yes.
"I think it's a fantastic idea. I think the elimination of any type of tax is a good thing," says Tom Vear of Doncker's Candy Store in Marquette.
And it's small businesses like his that Governor Snyder's tax reform caters to.
The MBT currently applies to businesses that make more than $350,000 a year and it has three parts: an 8 percent tax on revenue, a 4.95 percent tax on profits, and an additional 22 percent state tax, a process which, Marquette CPA Lloyd Houle says, is a cumbersome one.
"It's very complicated; there's a lot of credits, exemptions, deductions, that favor some business and hurt other business," says Houle.
Under the new system, business owners like Vear will only pay taxes once on their income. Vear says that, for Donckers, the reforms would save him time and money as his business grows.
"As we've been growing, it would be in the area of of $500 to $600, but it's also the savings of not having to deal with an accountant and the forms filled out, so there's a lot of other savings involved," Vear says.
Since Vear took ownership, he's worked to expand the 115-year-old business with the addition of a lunch operation and soda counter. Without the MBT, he'll be able to put more energy and resources into its continued growth.
The bill just needs the Governor's signature before it becomes law.
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