According to recent reports, two bills currently making their way through the Michigan Legislature seeks to limit the business tax credits that have proven problematic in recent years. If passed, the bills would prevent the Michigan Economic Growth Authority (MEGA) from entering into new agreements allowing tax credits for businesses, and would prohibit the MEGA from changing existing agreements, unless the changes results in a credit reduction.
In February, officials reported that the tax credit program that unexpectedly brought on $9.4 billion in potential liability for legislators over the next two decades. According to reports, Michigan faces a $289 million budget shortfall in 2015, which officials largely attribute to the nearly $11.7 billion in business tax credits promised to as many as 240 businesses over the past 20 years. A large portion of those credits were authorized for the automotive industry to leverage new jobs and retain jobs during an industry bleed-out last decade, especially during the recession, reports Crain’s Detroit. However, many other business sectors benefited from the government’s assistance. While it remains to be seen exactly how the new legislation will affect Michigan business owners, larger firms will likely see the most significant impact.
At Capital Insurance, we strive to help Michigan businesses succeed by protecting their assets and helping to secure their bottom lines. We offer a complete portfolio of business insurance and risk management solutions to businesses throughout Southeast Michigan. Our Michigan business insurance specialists will work diligently with you to evaluate the full scope of your loss and risk exposures before crafting a customized plan designed specifically for your operation. To learn more about our operation and all our business solutions, give us a call today at (888) 296-0418.