Tax Cuts Become Law for State

IMPCO.MACHINE.TOOLS

Tax Cuts Become Law for State's Businesses

by Dewson Bell | Detroit Free Press | December 21, 2005

LANSING - It's official. The tax bite for Michigan manufacturers will ease in 2006.

Gov. Jennifer Granholm signed legislation Tuesday to lower the levy on machinery and equipment and to provide incentives for companies that build products in the state.

The package of bills, approved by the Legislature last week, will provide an estimated $600 million in tax breaks over the next four years. It is a less sweeping version of legislation Granholm proposed in February that would have cut taxes more on manufacturing but increase the burden on other business.

That plan foundered against Republican opposition in the Legislature, went through several revisions and failed compromises before GOP leaders pushed through the package Granholm, surrounded by Democratic lawmakers, signed Tuesday at Lansing machine tool maker Industrial Metal Products Corporation.

Granholm said the tax relief, which some business leaders called anemic, is part of an overall effort to "provide a more competitive playing field" for Michigan manufacturers.

She acknowledged that more needs to be done but said she is unsure whether it would be possible to address fundamental business tax reform in 2006, an election year.

House Speaker Craig DeRoche, R-Novi, called Tuesday's tax cuts "substantive and meaningful" and a good alternative to the tax shift originally proposed by Granholm.

The eight-bill package signed Tuesday includes:

A 100% personal property tax credit for equipment installed in 2007-08 that brings jobs to Michigan.
A 15% personal property tax credit for manufacturers to begin Jan.1.
Special tax breaks for bankrupt Delphi Corp. and the buyers of former Visteon Corp. plants.

Dave Hougthon, president of Industrial Metal Products in Lansing, where Granholm signed the bills, said his company would save only about $7,000 as a result of the new tax laws.

But he said he hopes the package would improve the business climate and buying power of his customers, many of which are auto-related manufacturers.

IMPCO Machine Tools

3417 West St. Joseph Street, Lansing, Michigan USA 48917

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