Hallelujah - Mbt Being Repealed
May 2011, Vol. 26 No. 101
Editor: George Kallas, C.P.A.
In This Issue...
Checklist For How To Review Your Monthly Financial Statements Here Is A Simple Solution To The Social Security Problem Restaurant Promotion Obtain Required Labor Law Posters At Kallas Thank You For Another Great Tax Season Rules And Tax Benefits For New Start-Up Restaurants Onerous 1099 Law Repealed One Time Amnesty Program Available Now And More...
HALLELUJAH - MBT BEING REPEALED
T
he absolute bane of the businessman in Michigan has been the MBT (Michigan Business Tax) and before that, the SBT (Single Business Tax).
Both the MBT and the SBT are/were “value added taxes”. Meaning they are not based on profits and losses like the federal tax but on specially defined tax bases, credits, exemptions and just about anything else a politician could throw in to make it more complicated. Michigan is the only state to employ such a tax and I can tell you from experience that tax accountants from other states would tell their clients to avoid doing business in Michigan just because of the MBT. Depending on how your credits, compensation, new equipment or your other factors entered into the calculations you could have a tax of 2% of profits all the way up to 40% of profits. And one of the worst aspects of the MBT was there was no easy way to plan ahead on what the tax would be. Preparers would have to pre-calculate the tax prior to year end and if the numbers changed, the tax could change drastically. Add on top of it all a surcharge and the concept of unitary group which required you to combine businesses under one ownership and you had a tax nightmare which Michigan businesses have endured for years. But we can now see the light at the end of the tax tunnel. Governor Snyder, the Michigan Senate and the Michigan House have all agreed in principle to eliminate the MBT forever. There will be no more state tax for small businesses like restaurants and bars starting January 1, 2012. The
Editor: George Kallas, C.P.A.
In This Issue...
Checklist For How To Review Your Monthly Financial Statements Here Is A Simple Solution To The Social Security Problem Restaurant Promotion Obtain Required Labor Law Posters At Kallas Thank You For Another Great Tax Season Rules And Tax Benefits For New Start-Up Restaurants Onerous 1099 Law Repealed One Time Amnesty Program Available Now And More...
HALLELUJAH - MBT BEING REPEALED
T
he absolute bane of the businessman in Michigan has been the MBT (Michigan Business Tax) and before that, the SBT (Single Business Tax).
Both the MBT and the SBT are/were “value added taxes”. Meaning they are not based on profits and losses like the federal tax but on specially defined tax bases, credits, exemptions and just about anything else a politician could throw in to make it more complicated. Michigan is the only state to employ such a tax and I can tell you from experience that tax accountants from other states would tell their clients to avoid doing business in Michigan just because of the MBT. Depending on how your credits, compensation, new equipment or your other factors entered into the calculations you could have a tax of 2% of profits all the way up to 40% of profits. And one of the worst aspects of the MBT was there was no easy way to plan ahead on what the tax would be. Preparers would have to pre-calculate the tax prior to year end and if the numbers changed, the tax could change drastically. Add on top of it all a surcharge and the concept of unitary group which required you to combine businesses under one ownership and you had a tax nightmare which Michigan businesses have endured for years. But we can now see the light at the end of the tax tunnel. Governor Snyder, the Michigan Senate and the Michigan House have all agreed in principle to eliminate the MBT forever. There will be no more state tax for small businesses like restaurants and bars starting January 1, 2012. The