Commonsense changes will make Michigan a better place for business

The Michigan House approved a bipartisan-supported plan Thursday to improve Michigan’s tax codes that was spearheaded by state Rep. Greg VanWoerkom, Republican vice chair of the House Tax Policy Committee.

The plan makes necessary clarifications to inconsistent sales and use tax laws that have proved to be confusing and cumbersome for retailers throughout the state.

Recent audits from the Department of Treasury decided that businesses must pay sales and use taxes that were not collected on delivery and installation. Businesses that believed they followed proper procedures were then forced to either pay sales and use tax or take the state to court.

VanWoerkom said sales and use tax should only be applied to the purchase of the tangible goods and not the services related to that purchase.

“Our existing tax laws are creating an unfair environment for both businesses and consumers,” said VanWoerkom (R-Norton Shores). “This plan will fix our broken system and ensure the state can no longer use vague statutes to target businesses.

Additionally, equipment used for industrial processing was thought to be exempt from sales and use taxes under the industrial processing exemption, but the state’s treasury department under the Whitmer administration has exploited vague laws to penalize small businesses that produce aggregate materials used in road construction.

“The bipartisan support this plan received proves that Republicans and Democrats alike agree we need to remove these costs and barriers for Michigan businesses,” VanWoerkom said. “I am hopeful this plan continues to move swiftly through the process to deliver relief sooner than later.”

House Bill 4137 passed the House with an 85-18 vote, while HB 4054 passed the House with an 80-23 vote. The measures now move to be considered by the state Senate.

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