LANSING – The Michigan Senate on Wednesday passed a pair of bills that would exclude from the sales tax the value of a trade-in for a new or used motor vehicle, watercraft or recreational vehicle and phase that process in over 10 years.

Both SB 89 and SB 90 saw two amendments, the first from Senate Majority Leader Randy Richardville (R-Monroe) that changed implementation language regarding automobiles to say “fiscal year” instead of “calendar year” to put the legislation more in line with the budget.

Sen. Jack Brandenburg (R-Harrison Township) also won an amendment for both bills that changes the effective date for the watercraft credit from June 1, 2013, to the day the bills – if signed by the governor – become law.

SB 89 passed 36-2 with Sen. Roger Kahn (R-Saginaw Township) and Sen. Coleman Young II (D-Detroit) voting against the bill. Senate Minority Leader Gretchen Whitmer (D-East Lansing) was absent from session.

“The problem with sales tax on the difference or any of the other well-meaning bills of this nature is that they are (unaccompanied), in every instance, by a recitation of where the cuts in the budget will be to give out the goodies,” Kahn said as his no-vote explanation. “It is disgusting.”

SB 90 passed the Senate unanimously, 36-0.

In a Senate Finance Committee hearing last week, the Department of Treasury estimated enacting the bills could cost a total of about $240 million over 10 years.

But the panel was less than impressed with such a concern as it relates to a multi-billion dollar budget, and Sen. Dave Robertson (R-Grand Blanc) said on Wednesday that while he understands the concern, these bills are far improved in acknowledging that aspect by including the 10-year phase-in previously suggested by Treasury itself. Similar bills passed both houses of the Legislature in the 2011-12 term, but died in the House as the administration objected to them.

“Unlike previous attempts with sales tax on the difference where the bill is passed in one chamber only to not receive attention in the other, this has a phase-in, which is an attempt to try to be sensitive to the legitimate concerns that are raised about the budget and it phases in the auto portion over the next 10 years,” he told reporters after session.

“I think every attempt has been made to try and be accommodating to the concerns about the budget, but I think that we need a tax cut for Michigan citizens,” he said. “Automobiles are the second-largest purchases that most people have in their lives and as I say, we’re one of only six states in the nation that doesn’t have some kind of acknowledgement of this and we’re losing sales as a result.”

Governor Rick Snyder has not necessarily been keen on the idea and Mr. Robertson said he had not heard what the administration thought of the latest legislation, but he was optimistic on being able to reach an understanding.

WITHHOLDING REQUIREMENTS: The Senate also unanimously passed a bill (SB 65 ) that would clarify the withholding individual income tax requirement for certain members of a flow-through entity, such as general partnerships, limited partnerships and limited liability partnerships.

Currently, the corporation must file the exemption certificate with the Department of Treasury and provide a copy to the flow-through entity, a Senate Fiscal analysis states. Under the bill, instead, the department could require the member to file the certificate and provide a copy to the entity.

This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com