BY BILL O'BRIEN
TRAVERSE CITY -- Jason Gillman's company sells security equipment, and the Traverse City man's Small Business Tax bill typically cost him around $2,500 a year.
But Gillman now finds himself owing more than six times that amount under the new Michigan Business Tax.
Gillman and dozens of other local business owners vented their frustrations over the new MBT at a roundtable event held Friday at the Traverse City Area Chamber of Commerce.
Several small businesses said their tax liability soared under the MBT compared to the state's Single Business Tax, a long-criticized tax code scrapped last year when lawmakers overhauled the state's business tax set-up.
The new tax also boosted accounting costs, created delays in making tax payments and uncertainty about how to plan for future tax liability, speakers said.
"We're spending a lot of time and money dealing with something that never should have happened in the first place," Gillman said. "We're still trying to sort all this out."
Phil Cochran of Brown Lumber Co. said his business's state tax bill went up $59,000 last year, even while the lumber yard struggled to break even in the state's poor economy. He may have to lay off workers to close the gap, he said.
"This is a major disincentive for business," he said.
Matt Anderson of Global Marine Insurance in Traverse City said his agency's business tax bill doubled under the SBT. Now his accountants recommend shifting some of the firm's employees to the company's operation in Florida to ease its tax burden.
"We don't want to do that," he said. "It's one of the options we've got to do."
Several of the comments went beyond MBT. Small business owners complained about huge tax breaks handed out by state lawmakers last year for large companies like Meijer, Spartan Stores and Michigan International Speedway. Others supported the "Fair Tax" proposal that would replace the Michigan Business Tax, personal property taxes and other state taxes with a higher sales tax.
State Rep. Howard Walker and Sen. Jason Allen, both Traverse City Republicans, hosted the event. Walker told the group it's "almost impossible" that any changes to the MBT will be considered by the Legislature this year, but hopes to create some momentum for some long-term amendments.
"We need to build that public pressure," Walker said.
A state Senate subcommittee reviewing the MBT's impact will host another public forum on the Michigan Business Tax on Monday at 11 a.m. at the University Center in Gaylord. Business owners were encouraged to contact their local chambers with their concerns.
