Business leaders plot fight on tax

They aim to pressure Lansing to repeal new sales levy now, rather than wait for state vote.

Robert Snell / The Detroit News

The earliest a band of business groups could organize a referendum asking voters to repeal a state sales tax expansion is November 2008, one of the tax fight's leaders said Tuesday.

But a group of business leaders hopes to put enough pressure on legislators before then and convince them to repeal or drastically amend the controversial 6 percent tax on services that hurts everyone from Big Three automakers to carpet cleaners, according to lobbyists and business owners who met privately in Lansing on Tuesday to hatch a two-pronged attack.

"We want a big choir singing on this one," said Todd Anderson, lobbyist for the Small Business Association of Michigan, which initiated the closed-door summit. "It's definitely an uphill battle, but winnable."

The effort would undo a last-minute compromise that helped legislators balance the budget and create a revenue shortfall that would endanger schools, public safety and health care benefits, said Greg Bird, spokesman to House Speaker Andy Dillon, D-Redford Township.

"We would hope that any organization that is wanting to change what already has occurred would come forth with an entire solution," Bird said.

Meanwhile, state Rep. Dan Acciavatti, R-Chesterfield Township, introduced legislation Tuesday to repeal the 6 percent sales tax.

"Michigan cannot tax itself into prosperity," he said in a statement. "If residents are forced to pay more taxes, they will spend less on goods and services. This in turn, will weaken our economy even more."

The meeting involved 66 business groups and individual business owners who have formed a coalition to persuade lawmakers to repeal or drastically curtail recently passed legislation.

The tax, which takes effect Dec. 1, is on services such as carpet cleaning, tree trimming and a wide range of business consulting services.

Further meetings will be scheduled but Tuesday's two-hour event in Lansing was to rally support among the various business groups, which included the Michigan Chamber of Commerce, the Detroit Regional Chamber of Commerce, National Federation of Independent Business and Associated Builders and Contractors, among others.

A referendum would require about 350,000 signatures supporting the ballot issue, Anderson said. A referendum is also not as appealing as a repeal because the tax already would have been in effect for almost a year before residents could vote on the referendum, he said. But with a repeal the tax could be stopped before it even starts.

The Senate Fiscal Agency estimates businesses would pay $544 million of the $737 million collected in a full year under the tax. Of that, $226 million would be paid by business consulting firms. Second was office administration services at $95 million, which also would be paid by businesses. Then comes personal services paid by consumers, such as manicures, massage, astrology and others, at $58 million, and then janitorial services, paid mostly by businesses, at $53 million. Thousands of state companies would be affected.

Detroit News Staff Writers Mark Hornbeck and Gary Heinlein contributed to this report. You can reach Robert Snell at (313) 222-2028 or rsnell@detnews.com.