LANSING – Although it would still cost the state $6 million, a fix prompted by the Supreme Court’s decision on IBM v. Treasury passed the House on Tuesday that could save the state another $1 billion.

SB 156 , introduced by Sen. Jack Brandenburg (R-Harrison Township), already addressed the Michigan Business Tax, so the House used it as a vehicle to pass the change. The bill was approved 100-10.

In the decision made in mid-July, the Supreme Court held the Michigan Business Tax was in fact an income tax under the broad definition of income tax in the Multistate Tax Compact. That would allow IBM to calculate its taxes under a three-step apportionment factor which allowed it a much larger refund than the state allowed. The case settled for $6 million for IBM, which will still need to be paid by the state despite the bill passed on Tuesday.

However, the bill eliminates the compact agreement form 2006, said Rep. Joe Haveman (R-Holland), therefore eliminating other companies from getting the same ruling as IBM and allowing the tax structure to operate as intended, he said.

“We were looking at a $1 billion hole in the budget which is about 10 percent of the General Fund, so we had to deal with it,” Haveman told reporters. “It is unfortunate that the Supreme Court made the ruling they did, I disagree with it. No Legislature, no matter who the administration was or who was here, ever would put together a piece of tax legislation that would benefit out-of-state companies versus in-state companies.”

Haveman said there has been no final decision from the Supreme Court on if they will rehear the case. But he said the issue still needed to be addressed. He also said he hopes the Senate will act quickly as well, rather than waiting for the Supreme Court to announce whether or not they will rehear the case.

Haveman did say he hopes the Supreme Court will agree with the Legislature.

“I don’t think we did it wrong. Nor do I think the previous Legislature got in wrong in 2007,” he said.

Haveman wouldn’t go as far to say the Supreme Court was wrong, but said, “We got it right.”

The bill also includes a $1 million appropriation for the 2014-15 fiscal year to implement the changes.

Six Democrats and four Republicans voted no on the bill, the Democrats were: House Minority Leader Tim Greimel of Auburn Hills, Rep. Scott Dianda of Marquette, Rep. Doug Geiss of Taylor, Rep. Jeff Irwin of Ann Arbor, Rep. Ellen Cogen Lipton of Huntington Woods and Rep. Rose Mary Robinson of Detroit.

The Republicans who voted no were Rep. Bob Genetski of Saugatuck, Rep. Ken Goike of Ray Township, Rep. Ed McBroom of Vulcan and Rep. Tom McMillin of Rochester Hills.

DRIVER’S RESPONSIBILITY FEES: The House also passed unanimously SB 633 , which would allow 10 hours of community service per each eligible fee owed to be accepted instead of payment.

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