- Associated Press - Monday, May 18, 2015

LANSING, Mich. (AP) - Smokers and alcohol drinkers paid more taxes last year than Michigan companies paid in net business income taxes, according to a newspaper’s analysis published Monday.

Revenue from so-called sin taxes on tobacco, beer, wine and liquor totaled $290.5 million in the 2014 fiscal year, more than twice the $137.6 million net income taxes paid by Michigan businesses after $768.8 million in refunds from tax credits, The Detroit News reported (https://bit.ly/1Ee03IZ ).

State revenue numbers show net business income taxes have dropped 90 percent since 2011 when Gov. Rick Snyder and lawmakers delivered business tax relief. The figures show that has depleted the state’s main operating fund of $1.33 billion.

“The fact that wealthy corporations are contributing less to the state budget than those subject to an excise tax on tobacco should be a real wake-up call to how little corporations are currently paying in taxes,” said House Minority Leader Tim Greimel, D-Auburn Hills.

The percentage of general fund revenue from business income taxes also has dropped as tax credit payouts to companies have grown.

Republican lawmakers and business groups, however, note that corporations pay other state taxes on property, fuel, utilities and supplies, while some business owners pay the 4.25 percent personal income tax on their profits, which is harder to track.

“I’ve heard companies argue that they’re paying more than they should now,” said Senate Majority Floor Leader Mike Kowall, R-White Lake Township. “Some would have you believe we raised everybody’s taxes to give these corporations a big tax cut. That’s not the fact at all.”

Regardless, the tax trend is expected to continue. Taxes from the Michigan Business Tax and Corporate Income Tax are projected to total $244 million this year, while beer, liquor, wine and tobacco taxes will total about $280 million, according to Senate Fiscal Agency data.


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