Published in Economic Development

Business groups urge Whitmer to sign property tax forgiveness bill

BY Friday, December 18, 2020 10:06am

Business groups are urging Gov. Gretchen Whitmer to sign legislation that would forgive fines, late fees and interest on unpaid summer 2020 property tax bills.

The state House passed Senate Bill 943 Thursday night on a 60-43 vote and sent it to the governor, who vetoed broader legislation on the issue in July.

Lawmakers have revisited the policy since then, and took up the issue again in the lame-duck session as COVID-19 cases surged through the fall. The case surge led the Whitmer administration to impose new restrictions — now in effect at least through Sunday — that halted indoor dining at bars and restaurants, limited capacity for retailers, and shut entertainment venues and recreational facilities. 

Business advocates pitch the bill — sponsored by Sen. Peter MacGregor, R-Rockford — as a small way to offer relief to affected businesses.

“Signing Senate Bill 943 is one of the most immediate and impactful actions Gov. Whitmer can take to give businesses, closed by emergency order, a fighting chance to keep their doors open,” Grand Rapids Area Chamber of Commerce President and CEO Rick Baker said in a statement.

The bill, if signed into law, would provide forgiveness on late fees, penalties and interest on unpaid property taxes through Feb. 15 to eligible businesses “that experienced economic hardship as a result of the COVID-19 pandemic or the government’s response to the pandemic, or both,” according to bill language.

“Restaurants and other impacted businesses are a key part of communities across Michigan and they need help. With a vaccine being deployed, we need to bridge these businesses until they can earn enough revenue to survive, and power our recovery,” said John McNamara, vice president of government affairs for the Michigan Restaurant and Lodging Association.

The legislation directs the Michigan Department of Treasury to develop an application process for eligible businesses to defer payment of their summer 2020 property taxes. They could apply for the deferral until Jan. 31, 2021.

Legislators may still put a $5 million cap on the amount statewide that is forgiven, said Joshua Lunger, senior director of government affairs at the Grand Rapids Chamber. That cap could come in an upcoming supplemental appropriations bill legislators will consider, and could address concerns of both the state and municipalities that are already struggling with budget concerns, Lunger said.

The bill includes language that state lawmakers intend for the Department of Treasury to provide payments to local taxing units that’s equivalent to the penalties and fees waived. Those payments are “subject to appropriation.”

“We wanted to make sure everyone was protected here, including the state,” Lunger said.

Businesses eligible for forgiveness include entertainment venues, exercise facilities, food service establishments, and recreation facilities or places of public amusement.

Bill supporters include the Grand Rapids Chamber, Michigan Chamber of Commerce, Michigan Restaurant and Lodging Association, National Federation of Independent Business and Small Business Association of Michigan.

“Piling fees and penalties on taxes that went unpaid because of government ordered restrictions is unacceptable and this bill means a fresh start for those who were the most burdened,” said Dan Papineau, director of tax policy for the Michigan Chamber of Commerce.

Making the bill law would give “common sense support for struggling businesses and means a greater likelihood they can make it through what we expect to be a harsh winter,” said Charles Owens, Michigan state director for the National Federation of Independent Business. 

Earlier this month, the Department of Treasury gave some tax relief to businesses that rely on social gatherings or have otherwise been affected by recent restriction by delaying December’s monthly sales, use and withholding tax payments by a month.

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