10 July 2008

Ministers of Finance weigh in on Michigan Business Tax issue

The following is excerpted from the 9 July 2008 edition of “Canadian Transportation and Logistics”.

..[T]he Federal Government and the Government of Ontario are standing up for international businesses such as trucking companies and automotive parts manufacturers…

…Minister Jim Flaherty's letter to Michigan Governor Jennifer Granholm .. indicated the federal government's concern regarding how Canadian businesses will be treated under this new tax regime. The letter encouraged swift passage of amendments to the Michigan Business Tax Act that would provide for fairer treatment for those businesses. Provincial Finance Minister Dwight Duncan has previously written to the State Treasurer and last March Premier Dalton McGuinty also wrote Governor Granholm expressing Ontario's concerns.

Recent changes to the Michigan Business Tax have eliminated the exemptions for international businesses that do not have physical locations in Michigan, meaning such businesses will now be taxed under the new business tax program. CTA estimates that if imposed on Canadian trucking companies, the MBT could amount to an additional tax of $1,000 per truck per year...