Chamber Advocacy Leads To Passage Of PPE Tax Exemptions In MI HouseMarch 4, 2021
The bills would only exempt PPE and other tangible personal property from the taxes if they were specifically used in relation to COVID-19. If the bill passes the Senate and the Governor signs it into law, businesses with written COVID-19 safety plans required by the Michigan Occupational Safety and Health Administration would not have to pay the state’s 6% sales and use tax on purchases of PEE and disinfecting supplies. House Bill 4224 and House Bill 4225 both passed 104-6, with broad bipartisan support.
Listening to member businesses throughout southeast Michigan, the Chamber identified how critical PPE is for companies to operate during a pandemic and how those previously unplanned business expenses could be devastating to their bottom line. Tax relief is essential to making PPE more affordable.
“Throughout this pandemic, small businesses around our state have paid taxes on the equipment needed to remain operational at great cost to their bottom line,” said Matt Patton, Director of Government Relations for the Chamber. “Despite a bitterly disagreeable political climate, these bills brought Democrats and Republicans together in order to make life-saving PPE more affordable by stopping the government from profiting off of the necessity of it.”
Patton testified on behalf of business before the House Rules and Competitiveness Committee in February, which was a critical step in these bills’ ultimate passage. In that committee hearing, Democratic co-sponsor of the bill Rep. Sarah Anthony (D-Lansing) said she was impressed by the perseverance of small businesses fighting to keep their doors open during the pandemic.
“The reality is there is a significant cost in order to actually implement those changes needed to operate in a global pandemic,” said Anthony. “They are doing everything they can. They are doing it right. They are following the rules. And I feel like it is now our responsibility to extend support.”
The bill’s other co-sponsor, Rep Jim Lilly (R-Park Township), released a statement after the bill’s passage on Wednesday.
“Over the past year, job providers all across Michigan have faced unprecedented challenges simply to stay in business and keep their doors open,” he said. “The cost of personal protective equipment to keep their employees and customers safe is part of that challenge. With this legislation, we have a fantastic opportunity to help. Keeping people safe should not be a barrier to keep a business open, earning a living, and keeping our economy and communities strong.”
The bill’s exemptions would be retroactive and would apply beginning March 10, 2020, until December 31, 2021.