Michigan state legislature has voted to approve the abolition of the state business tax starting in 2008. The move is a bid to boost investment and job creation.

The Single Business Tax will be removed under the bill. This value-added tax currently generates $1.9 billion a year in revenues from the state. It will end on December 31, 2007.

House Speaker Craig DeRoche (R) said that the elimination is part of a broader plan to reform the tax structure of the state in an attempt to draw in more business.

"Michigan is struggling, people are losing their jobs and thousands of college grads are leaving our state," said DeRoche. "Reforming our business tax system is not only the right thing, it is the necessary thing to move our state in a new direction and brings jobs back to Michigan."

State GOP leaders say that Michigan's key business taxes aren't competitve with other states. A report bythe Anderson Economic Group specifically cited the Single Business Tax as the only state value-added tax in the country.

DeRoche and Senate Majority Leader Sikkema named a joint House and Senate committee earlier in the year to develope a new business tax for Michigan. The report is expected by the beginning of December.

Governor Jennifer Granholm (D) cautions that the elimination of the revenue will jeopardise key services, such as education. However, Granholm cannot veto the repeal of the tax as the vote came about as a result of a petition.

Martin Lukac represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web-company specializing in real estate and mortgage rates. We specialize in daily updates, mortgage news, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!

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