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Single Business Tax

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Pro's & Con's of the SBT

Michigan adopted the Single Business Tax (SBT) in 1975. It is a value-added tax that replaced the corporate income tax and six other business taxes. This represents about 6% of all state revenue. Under current law, the SBT is scheduled to be completely phased-out by 2009. The rate is reduced by 0.1% each year. However, the phase-out has been paused for two years to allow the state budget to stabilize. ( There are guidelines that they will have to follow if they decide to replace the SBT. Examples of this are: the governor and state legislature must agree, Small businesses under $350,000 in gross receipts should be exempt; the tax should go to the state, and many more.


* SBT actually punishes companies for adding payroll and benefits.

* Government can totally revamp taxes all together.

* Businesses would be happier.

* Maybe it would entice more businesses to come to Michigan if the replacement tax satisfied them.

* New tax should be better for small businesses.

* Could raise chances of people becoming reelected.

* After 2009 there will be a plan for income for the government.

* Employers may be more willing to hire more employees.


* No one is sure where the money to replace this tax will come from.

* New tax could be worse.

* Decisions to raise taxes somewhere else, like property tax.

* Could



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