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Michigan Ski Areas Hope House Bill Will Undo Tax

By Craig Altschul
November 20, 2007

Several new developments in the economically-challenged state have occurred since that story ran. Mickey McWilliams of the Michigan Snowsports Industries Association (MSIA) has reported that the Senate offered a slight olive branch by delaying implementation of the tax from Dec. 1 to Dec. 20. McWilliams added that Gov. Jennifer Granholm said she would "welcome a possible repeal so long as its replacement is revenue neutral."

The Michigan Legislature has been on recess for several weeks, but the lobby firm of Muchmore Harrington Smalley & Associates whis is representing the ski areas, has prepared an analysis of a "consensus bill" introduced in the House by Rep. Andy Coulouris (D-Saginaw). That bill offers an alternative to the service tax and repeals it before it is implemented. The original bill that affects ski resorts was passed at the witching hour Oct. 1 as a compromise measure to get the state budget approved. The issue is expected to be resolved - one way or the other - this week, probably in conference committee resolution.

Does the new bill have a shot? Maybe. Maybe not. MSIA has provided The Industry Report with a copy of that analysis paper. The bill amends the Michigan Business Tax Act (MBT) to impose an additional surcharge on taxpayers and repeals the service tax on things like ski lift tickets. The bottom line, says the lobby firm, would decrease in FY08 by $56.3 million and increase in FY09 by $55.9 million. That, presumably, meets the governor's "revenue neutral" requirement.

The arguments in support of the bill are that a surcharge would be easier for the treasury to administer than the service tax; reduces the burden on a number of businesses that would be taxed unfairly under the service law (such as ski areas); and the broader base lets the tax be spread more evenly.

The other side of the argument is that, while the bill reduces the overall tax burden on some businesses, it imposes a larger burden on others. The ailing Big 3 automakers, for example, would have their tax burden relieved at the expense of other businesses but, the lobby firm notes, the automakers would be significantly overtaxed under the service tax.

Support for the new bill comes from the Michigan Manufacturers Association; Ford, General Motors, Chrysler; Chambers of Commerce in Detroit and Grand Rapids; AT&T; and some major life insurance, trade groups, and a large grocery retailer. Opposition comes from the Michigan Chamber of Commerce, associations of realtors, restaurateurs, food, and petroleum dealers, independent insurance agents, builders and contractors, and others. The lobby firm could find no "neutral" voices.

So, the drama and the countdown to Dec. 20 - the new Michigan ski areas tax day - continue.

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