Tuesday, March 11, 2008

evil cabal

This comment was written today to a post of November 26, 2007. It deserves to be more widely read than it will be in the archives. The following will be somewhat clearer if you read the November post first.
Anonymous has left a new comment on your post "Michigan Business Tax - disaster in the making":

My Illinois business just found out that a $22,000 Michigan SBT liability for 2007 will become a $57,640 liability for 2008, and all I do is have the misfortune of having a couple customers in this pathetic state! This new tax amounts to 25% of the profit I generate from my Michigan business. Add to that my 34% federal obligation on my business profits, throw in a couple more % for Illinois, and I am being ROBBED of 70% of the money I make just because a customer decides to locate in Michigan. I hope you Michigan voters vote this evil cabal out before they ruin your state. Gov Grandholm [sic] is gonna wake up one day and discover no business willing to do business in Michigan, so how will she pay the welfare benefits for all those unemployed workers in Flint and Detroit?

Typical commie liberals.
Ah, the misfortune of having a couple of customers in Michigan.

That's a 162% tax increase.
It's a trade war and I wouldn't be at all upset to see some retaliation.

Anonymous does not say whether the 25% of his Michigan related profit is based on gross or net. Adding 34% federal tax makes it seem like gross. If so, I imagine his Michigan customers may shortly be looking for a new vendor.

While we're revisiting the November post, these comments are also worth noting:
Mitch [of Canada's John Galt] said...

The Republican congress had HR 1956 tabled for the floor of the house last September. This would have redefined Nexus per P.L. 86-272, stating that a state could only impose business level taxes (i.e. MBT) only if the taxpayer had physical presence in the state.

Alas, many states are using more esoteric definitions such as "directed economic activity" in order to tax companies that have no physical property in payroll in a state (MBNA v. West Virginia). Unfortunately, the U.S. Supreme Court refused to hear the case.

States will continue to expand the definition of Nexus, ensnaring more out of state entities (perfect since they don't vote in their minds). This will be coming to a head within the next few years unless congress or the Supreme court stops it.
9:20 PM EST

Anonymous said...

Please include Madam Governor and her statist appointments in the Treasury Department when handing out idiot awards.

Complete incompetence. Unbelievable incompetence.
9:42 PM EST


jgillman said...

I have an essay on this here..
http://michigantaxes.com/wordpress/?p=132

Talking to the aide for Howard Walker, I am still left a little confused, but there may be (a little) hope for some of us. It is still sickening, how ANY law could be passed without the full understanding of it's impact PRIOR to it's passage
10:37 AM EST

1 comment:

Mitch said...

If you think that the MBT is bad, you should see California's LLC "Fee" - it has recently been held unconstitutional. The California Franchise Tax board charges a "processing fee" to corporations and LLC that file a tax return. LLCs that do ANY business in California are subject to a fee based on the company's TOTAL sales, both inside and outside of California. If an LLC has over $5 million in total sales - the fee is over $12,000. A company could have $5 million in worldwide sales, only $100 of it in California, and lose $1 million, and if it had Nexus in California, it would still owe the $12,000.

Finally, some taxpayer had enough and the California Supreme court found the fee unconstitutional. But don't be surprised if they come up with something else.