Welcome back and welcome grocers!
Legislators are back and wasted no time getting back up to speed. The House and Senate returned on Jan. 11 and have been busy working on tax relief for citizens. Gov. Snyder and Legislators were quick to announce potential changes to the state’s personal income tax exemption (currently $4,000) to provide relief in light of changes to federal tax reform exemptions.
Due to the elimination of some federal exemptions, the state projected that would impact state exemptions as well and result in a higher tax burden. Accordingly, the governor, House and Senate have each proposed providing relief by increasing the exemption level from $4,000 to $4,500-$5,000. The governor’s plan would increase the exemption to $4,500. The Senate proposes a $5,000 exemption level (SB 746) and the House proposes a $4,800 exemption level with an added $100 credit for seniors who will be age 62 or greater by Dec. 31, 2018 (HB 5420–5422).
The Legislature also sped up tax relief for residents looking to use a trade-in vehicle for a new car. In a sudden and somewhat unexpected move, lawmakers voted this week to override the governor’s July veto of two bills that seek to speed up the phase-in of legislation approved in 2013 that allows car dealerships to only charge sales tax on the portion of the vehicle purchase paid with cash or credit rather than the full retail price. Under SB 94–95, the sales tax on the trade-in portion will be completely phased out by 2029 rather than 2039. The annual Detroit auto-show opened this week and many legislators will attend the charity preview tonight. The override is the first of Gov. Snyder’s term and has not been successfully used since 2002. The legislature’s decision will have an impact on the budget and could alter the feasibility of adopting a more generous income tax relief plan.
U.S. Supreme Court to revisit online sales tax collection
Brick and mortar retailers across the country welcomed the Jan. 12 announcement that the U.S. Supreme Court will take up a case this spring regarding whether out-of-state online retailers should collect state sales taxes. This case has the potential to help struggling, Michigan-based brick and mortar retailers who are forced to collect the state’s six percent sales tax on every dollar of every purchase while out-of-state online retailers do not. It could also help fill budget holes in states around the country. A report from Congress’ Government Accountability Office estimates $13 billion worth of sales taxes go uncollected each year. [Read more]
State of the State scheduled for Jan. 23
Gov. Snyder will deliver his eighth and final State of the State address next Tuesday at 7 p.m. It is expected the address will focus on the governor’s successes over his seven years in office. However, the governor prides his team on working in “dog years,” meaning they do seven times as much work in one year. Because of the governor’s continued look ahead we do expect there will be new policy announcements and calls to finish work on reforms to skilled trades, mental health and other long-term investments before he leaves office.
Employers should see decrease in unemployment taxes
The agency overseeing Michigan’s unemployment program announced Wednesday that employers should see a decrease in their unemployment insurance tax rates this year. Rates are projected to drop an average of 4.5 percent for businesses in Michigan. The average employer will pay an estimated $403.20 per employee during 2018.
In other good news, unemployment trust fund bonds purchased by employers in 2012 to provide money for the increase in benefit claims during the recession are projected to be paid earlier than expected. The bonds should be paid in full by July 2020. Employers may visit MiWAM or call the Office of Employer Ombudsman at 1-855-484-2636 with any questions.
SNAP retailer application changes
The Food and Nutrition Service (FNS) began implementing changes to SNAP retailer eligibility requirements on Jan. 17. The changes are a result of the “Enhancing Retailer Standards in SNAP” final rule and requirements in the Consolidated Appropriations Act of 2017. The online store application is back on line and applications are once again being accepted. For additional guidance please see the list of documents available on the USDA website:
- FNS webinar describing the changes to SNAP retailer eligibility requirements that became effective on Jan. 17
- One Page Summary for Store Owners
- SNAP retailer online store application
- Policy guidance related to the SNAP retailer policy
- Guidance on the definition of variety
- Guidance on what constitutes a stocking unit for purposes of depth of stock
- Guidance on the definition of accessory foods, which are eligible foods but are not counted as staples for purposes of store eligibility
Other important items to note:
- Biosimilars: The House Health Policy reported a bill that would allow pharmacists to substitute cheaper interchangeable biosimilar drugs when a brand name biologic drug is prescribed. HB 4472 allows pharmacists to meet the notification requirement by using the existing electronic medical records system used for billing purposes. MRA would like to see additional changes made to the bill to remove outdated language that has created legal challenges for pharmacies. Next step: House floor. | MRA Position: Oppose.
- 911 fee increase: A bill that would increase state and county 911 fees received a hearing in the House Communications and Technology Committee this week. SB 400 would increase the monthly 911 charge from 19 cents to 25 cents and allow county commissions to increase their charge from 42 cents to 55 cents. Prepaid wireless 911 surcharges would increase from 1.92 percent to 4.19 percent per transaction. The committee plans to make a few changes to the bill before taking a vote. Next step: House Communications and Technology Committee vote. | MRA Position: Oppose.
- Benefit eligibility: SB 752 introduced this week would extend the timeframe government assistance benefits are available to an individual after the individual gets married. Next step: Senate Families, Seniors and Human Services Committee. | MRA Position: Monitoring.
- Drones: Legislation introduced as HB 5427 this week would prohibit the use of a drone to deliver contraband into a correctional facility. These practices were already made illegal under a 2016 law that clarified illegal activities are still illegal if they are carried out by a drone. Next step: House Communications and Technology Committee. | MRA Position: Monitoring.
- Electronic transmission of insurance documents: Legislation introduced as HB 5430 this week would allow for an insurance company to electronically transmit notices to customers if customers affirmatively consent to receiving notices in this manner. Next step: House Insurance Committee. | MRA Position: Support.
- Government assistance: A bill introduced last week as HB 5386 would create a new program requiring the state to independently verify an individual’s eligibility to receive government assistance benefits including SNAP and Medicaid prior to awarding benefits. Legislators hope that the stricter pre-benefit verification system could help reduce potential fraud and identity theft. Next step: House Appropriations Committee. | MRA Position: Monitoring.
- Ransomware: The House Communications Committee reported two bills this week that would prohibit the unauthorized possession or use of ransomware. HB 5257–5258 would also add new penalties for anyone who intends to use it to harm, steal or prevent access to another person’s electronic data. Next step: House floor. | MRA Position: Monitoring.
- Child care business tax credit: A bill creating a tax credit for businesses that provide child care to their employees was recently introduced as HB 5380. The credit would cover up to 50 percent of a business’ expenses in providing child care. Next step: House Tax Policy Committee. | MRA Position: Monitoring.
- Trade-in sales taxes: In a somewhat unexpected move the House and Senate voted this week to override the governor’s July veto of two bills that seek to speed up the phase-in of legislation approved in 2013 that allows car dealerships to only charge sales tax on the portion of the vehicle purchase paid with cash or credit rather than the full retail price. Under SB 94–95, the sales tax on the trade-in portion will be completely phased out by 2029 rather than 2039. Next step: None. | MRA Position: Monitoring.
- Dog ordinances: Legislation introduced last week as SB 741 would prohibit local ordinances, policies, resolutions or rules banning dogs based on breed or perceived breed. Next step: Senate Judiciary Committee. | MRA Position: Support.
- Mass picketing: HB 5409 would provide remedies for employers or individuals to bring an action in court against a person or persons who engage in mass picketing that obstructs the ability to work, enter a building, or interferes with traffic. Next step: House Michigan Competitiveness Committee. | MRA Position: Monitoring.
