Michigan Liquor Control Commission (MLCC) Chairman Andy Deloney announced changes to the liquor control permit process today. This new procedure applies only to existing on- or off-premise license holders, and not new applicants, transfers of ownership, or transfers of location.
The permit applications that are being revamped include requests for permanent additional bars, requests to conduct beer and wine samplings, requests to add living quarters to the licensed establishment, and requests for Sunday Sales Permits, Catering Permits or permanent Specific Purpose Permits.
Effective immediately, all completed permit applications will immediately be placed on a consent agenda docket for approval by the Commission at the next day’s scheduled open meeting. Investigation by the Commission’s Enforcement Division or the local law enforcement agency is no longer required.
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National Healthcare Update: Michigan Exchange Legislation Passes Senate
November 10, 2011
The Michigan Business and Professional Association (MBPA), along with its sister group, the Michigan Food and Beverage Association (MFBA), work diligently to keep you up to date on our new federal healthcare law and how it will affect you, your family, and your business.
Although our Association’s did not support the passage of the Patient Protection and Affordable Care Act (PPACA), when given the option of allowing the federal government to control Michigan’s healthcare exchange, or having more state control, we opted for Michigan controlling its own healthcare exchange. We have had countless meetings with both key federal and state officials that are responsible for making critical decisions on how Michigan interacts in the federal healthcare exchange. Most recently in October we testified in front of the House Health Policy Committee on the need for a state run healthcare Exchange. Michigan must retain power over what happens with our healthcare. It is critical for us that the Michigan exchange allows for more options for the marketplace, is fair to small business, does not dictate carriers and coverage and allows for as much choice as possible with the least amount of negative impact on the economy. We were successful in these endeavors.
Update: Senate Bill 693 passed the Senate today, which creates the MIHealth Marketplace Act which will function as Michigan’s healthcare exchange that is required under the federal healthcare reform law passed last year. Highlights from the legislation include:
Establishes a small business health options program (SHOP) through which employers could provide healthcare coverage for their employees
IF PPACA is ruled unconstitutional or repealed, the SHOP would be suspended, thus no longer offering federal healthcare options to businesses
This Act cannot use State funds
Health insurance coverage costs will be the same on and off the exchange
Insurance agents maintain their role and compensation, offering healthcare services
Allows the Marketplace to charge assessments or user fees to participating health carriers to support its operations
Maintains two separate risk pools
This bill now heads to the House Health Policy Committee for further deliberation. As always, we will keep you up to speed as this legislation continues to move through the legislative process. Please contact our Government Relations Team with questions/comments at: BBochniak@michbusiness.org or by phone at: 517-374-9128.
By Bonnie Bochniak
MBPA/MFBA, Director of Government Relations
The Michigan Business and Professional Association (MBPA) and the Michigan Food and Beverage Association (MFBA), work diligently to keep you up to date on the happenings in Washington D.C. as our new healthcare law continues to move forward. What follows is an update of what is and what will be happening in this important arena.
Our government relations team has been working full speed ahead and lobbied diligently against the legislation to form a universal healthcare plan since the first discussions of such a proposal began. We continued the charge as President Obama signed the Patient Protection and Affordable Care Act on March 30th, 2010, to ensure our members are able receive the same high quality service by their agents. We have had countless meetings with both key federal and state officials that are responsible for making critical decisions on how Michigan interacts within the federal healthcare exchange. Most recently on July 13th, 2011 we testified in front of a Senate Health and Insurance Joint Committee on the need for a state run healthcare Exchange. Michigan must retain power over what happens with our healthcare, from providers to agents.
Below are recent updates and notes pertaining to our new healthcare law, and you may also visit our website www.michbusiness.org, and click the National Healthcare tab for more detailed information. In addition, please use our website to find more helpful links to understanding your healthcare options, obligations, and frequently asked questions.
On July 11th, 2011 the federal Secretary of the Health and Human Services (HHS) released much sought after information in regards to initial proposed regulation governing the health benefit exchanges under the PPACA. Highlights are:
Proposes a pathway for states to ensure that individuals and small groups have access to information about agents and brokers, should they wish to use one, on state exchange websites and in other publicly available materials.
Requires that navigators, including agents and brokers acting as navigators, not receive commissions or other payments directly from health insurance carriers, but specifies that these requirements only apply to health insurance exchange products.
Navigators must meet any licensing, certification or any other standards prescribed by the state or exchange, which will allow the state or exchange to enforce existing licensure standards.
A State does not have to be completely ready for federal certification as an independent state exchange on January 1, 2013. They would in turn be provisionally certified by HHS instead.
Repeal of the 1099 reporting requirement: Under the reporting requirement, that was set to begin in 2012, all companies would have been required to issue a Form 1099 to any individual or corporation from which they purchased more than $600 in goods or services in a tax year. The expanded reporting requirement would have resulted in an unnecessary and unfair burden for small businesses/your clients. This is now gone
Michigan’s role in the Exchange – Keeping Insurance Agents: MBPA was recently involved in assisting key state officials in how our State will function within the healthcare Exchange. A compilation of discussions from all stakeholder meetings is set to head to Governor Snyder soon for his thoughts and approval as we move forward.
Michigan continues to remain one of 20 states challenging the federal healthcare law under the direction of our Attorney General Bill Schuette.
Effective January 1, 2012: The new law provides incentives for physicians to join together to form “Accountable Care Organizations.” In these groups, doctors can better coordinate patient care and improve quality of services, help prevent disease and illness, and reduce unnecessary hospital admissions. If Accountable Care Organizations provide high quality care and reduce costs to the health care system, they can keep some of the money that they have helped save.
Accountable Care Organization: A group of health care providers who give coordinated care, chronic disease management, and thereby improve the quality of care patients get. The organization’s payment is tied to achieving health care quality goals and outcomes that result in cost savings
Reminder: The Affordable Care Act imposes an excise tax on employers that do not satisfy the market reform and consumer protection provisions of the Affordable Care Act equal to $100 per day for each affected participant, up to a maximum fine for unintentional failures of $500,000 per taxable year. The IRS (or HHS) has discretion to waive the tax in whole or in part to the extent the failure was due to reasonable cause and not to willful neglect, and small employers with no more than 50 employees may be exempt from such tax with certain exceptions.
Please visit our website for more and detailed information. Contact our Government Relations Team with questions/comments at: bbochniak@michbusiness.org or by phone at: 517-374-9128.
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By Bonnie Bockniak
MBPA/MFBA Government
Relations Director
The Michigan Business and Professional Association (MBPA), along with its sister group, the Michigan Food and Beverage Association (MFBA), work diligently to keep you up to date on the happenings at our State Capitol in Lansing, and also on federal issues in Washington D.C. We would like to bring to your attention what has occurred at the federal level in terms of unionization. The National Labor Relations Board has issued a Final Rule that may impact your business. Please see below for background and further information.
Background:
The National Labor Relations Board has issued a Final Rule requiring most private-sector employers to notify employees of their rights under the National Labor Relations Act by posting a notice. The rule is scheduled to be posted in the Federal Register on August 30, 2011, and will take effect 75 days later.
Employers should begin posting the notice on November 14, 2011. Copies of the notice will be available on the NLRB website and from NLRB regional offices by November 1.
Similar postings of workplace rights are required under other federal workplace laws. The 11-by-17-inch notice is similar in content and design to a notice of NLRA rights that must be posted by federal contractors under a Department of Labor rule.
The notice of rights will be provided at no charge by NLRB regional offices or can be downloaded from the Board website and printed in color or black-and-white. Translated versions will be available, and must be posted at workplaces where at least 20% of employees are not proficient in English.
Employers must also post the notice on an intranet or an internet site if personnel rules and policies are customarily posted there.
Questions and Answers:
Does my company have to post the notice?
The posting requirement applies to all private-sector employers (including labor unions) subject to the National Labor Relations Act, which excludes agricultural, railroad and airline employers. In response to comments received after the proposed rule was announced, the Board has agreed to exempt the U.S. Postal Service for the time being because of that organization’s unique rules under the Act.
When will the notice posting be required?
The final rule takes effect 75 days after it is posted in the Federal Register, or on November 14, 2011.
There is no union in my workplace; will I still have to post the notice? Yes. Because NLRA rights apply to union and non-union workplaces, all employers subject to the Board’s jurisdiction (aside from the USPS) will be required to post the notice.
I am a federal contractor. Will I have to post the notice?
The Board’s notice posting rule will apply to federal contractors, who already are required by the Department of Labor to post a similar notice of employee rights. A contractor will be regarded as complying with the Board’s notice posting rule if it posts the Department of Labor’s notice.
I operate a small business. Will I have to post the Board’s notice? The rule applies to all employers subject to the Board’s jurisdiction, other than the U.S. Postal Service. The Board has chosen not to assert its jurisdiction over very small employers whose annual volume of business is not large enough to have a more than a slight effect on interstate commerce. The jurisdictional standards are summarized in the rule.
How will I get the notice? The Board will provide copies of the notice on request at no cost to the employer beginning on or before November 1, 2011. These can be obtained by contacting the NLRB at its headquarters or its regional, sub-regional, or resident offices. Employers can also download the notice from the Board’s website and print it out in color or black-and-white on one 11-by-17-inch paper or two 8-by-11-inch papers taped together. Finally, employers can satisfy the rule by purchasing and posting a set of workplace posters from a commercial supplier.
What if I communicate with employees electronically? In addition to the physical posting, the rule requires every covered employer to post the notice on an internet or intranet site if personnel rules and policies are customarily posted there. Employers are not required to distribute the posting by email, Twitter or other electronic means.
Many of my employees speak a language other than English. Will I still have to post the notice? Yes.The notice must be posted in English and in another language if at least 20% of employees are not proficient in English and speak the other language. The Board will provide translations of the notice, and of the required link to the Board’s website, in the appropriate languages.
Will I have to maintain records or submit reports under the Board’s rule? No, the rule has no record-keeping or reporting requirements.
How will the Board enforce the rule? Failure to post the notice may be treated as an unfair labor practice under the National Labor Relations Act. The Board investigates allegations of unfair labor practices made by employees, unions, employers, or other persons, but does not initiate enforcement action on its own.
What will be the consequences for failing to post the notice? The Board expects that, in most cases, employers who fail to post the notice are unaware of the rule and will comply when requested by a Board agent. In such cases, the unfair labor practice case will typically be closed without further action. The Board also may extend the 6-month statute of limitations for filing a charge involving other unfair labor practice allegations against the employer. If an employer knowingly and willfully fails to post the notice, the failure may be considered evidence of unlawful motive in an unfair labor practice case involving other alleged violations of the NLRA.
Can an employer be fined for failing to post the notice? No, the Board does not have the authority to levy fines.
Was there a public comment period? What was the response? The Board received more than 7,000 public comments after posting a notice of the proposed rule in the Federal Register. A detailed description of the comments and the Board’s response to them, including responsive modifications to the rule, may be found in the Preamble to the Final Rule.
We value our relationship with you, and are here, at your service. If you have any questions please contact our Government Relations Team at: bbochniak@michbusiness.org or by phone at: 517-374-9128.
By Wayne Roberts
Tax Attorney, Dykema, Grand Rapids
It has been a tough road, but we can finally bid farewell to Michigan’s onerous MBT. We can focus more on keeping businesses in our great state, and also looking attractive again to outsiders who want to relocate here. The optimism of the MBT repeal has had wonderful effects on the business community already, and it will only continue. What follows is a recap of the MBT Repeal and the new changes in our state businesses taxes.
Recap: On May 25, 2011, Governor Snyder signed three tax bills into law that completely overhaul the Michigan business tax system. This will be the second comprehensive revision of Michigan business taxes in the past four years. These 2011 enactments will materially change both business and individual income tax law.
In general, the new law divides the current income tax act into separate parts for individual and business taxes and makesthe following changes:
Business Tax Changes
The primary business tax changes made by the 2011 tax bills include the following:
Imposition of a 6% corporate income tax (“CIT”) on C corporations effective January 1, 2012.
The new tax does not apply to sole proprietors or at the entity level to any flow-through entities such as partnerships, S corporations, or LLCs – this is a significant change from Michigan business taxes in place for more than 30 years.
Repeal of the MBT effective December 31, 2011, for most taxpayers.
Taxpayers with “certificated” credits can elect to continue to calculate their liability under the MBT in order to retain the benefit of such credits.
Income from multistate activities apportioned based solely on a sales factor; amendment of certain existing election provisions (beginning January 1, 2011) to prohibit taxpayers from electing out of single sales factor apportionment methodology under the current MBT or the new CIT.
Prospective elimination of all business tax credits except for the small business credit.
Note that the “new” small business credit retains basically the same 1.8% alternative income tax that applied under both the MBT and the previous Single Business Tax.
Mandatory combined filing for unitary business groups.
Note: The new bills include separate tax structures applicable to financial institutions and insurance companies that closely resemble the taxes applicable to such businesses under the MBT.
Individual Income Tax Changes
In addition to the more dramatic business tax changes, the tax bills also include changes to Michigan’s individual income tax laws (generally effective January 1, 2012), including the following:
Retention of the current 4.35% rate through December 31, 2012 (which defers the currently scheduled rate reduction to 4.25% until the 2013 tax year).
Imposition of a phased-in state income tax on income from pensions and other retirement income.
Elimination or limitation of other income tax benefits, exemptions, and credits, including exemptions allowed for a taxpayer’s children.
Business income reported on an individual return will be apportioned using a single sales factor instead of the current three factor formula.
The new law is intended to greatly “simplify” Michigan’s tax structure by repealing the complex MBT for most taxpayers. However, even with the simpler tax, many areas of ambiguity remain; and there is a great need for guidance from the Michigan Department of Treasury with respect to how different provisions will be interpreted and administered. Moreover, because there remains an election to claim existing credits by calculating business tax liability under the prior MBT Act, many taxpayers may need to prepare alternate calculations in evaluating and planning for Michigan taxes.
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By Chuck Moss
Appropriations Chair State Representative
So what’s going on in Lansing? The big news is that it’s summer and we’re not working on our budget. How come? We finished it two months ago. The 2011-2012 state budget was done before June 1st, balanced, and cut around $1.2 billion. Considering that the last four years’ budgets, two went right up to the September 30th deadline and two went over into government shutdown, this year we got the job done early.
Not just done early, but done right. We held the line on spending and actually made cuts. These cuts were certainly not universally popular. However, we began the tough road back to fiscal solvency. Michigan began putting money aside to pay for legacy costs, and to build back up our rainy day fund balance. We also tackled the years-ongoing structural deficit that led to mid-year shortfalls and unexpected mid-year program cuts. While we were at it, we adopted a two- year budget.
The budget was not without controversy. K-12 public school administrators and collective bargaining units were hopping mad about opening the School Aid Fund to higher education. But given the fact that our General Fund consistently helped out School Aid when GF was flush and SAF low, it seemed only fair to reverse the complement when the reverse situation occurred–particularly when Michigan has 11% fewer school kids than in 2004.
Speaking of K-12, the Governor has proposed changes in our current public school delivery systems for education. From districts like Detroit, which are on the verge of collapse, to schools less dire, but still under educating their kids, Michigan has too many students not getting the education they need. With proposed reforms targeting teacher performance, administrator performance, and financial management, we’re working on giving every kid a basic education, wherever they live.
Finally we’re tackling the post-employment legacy costs in state government. Lansing owes too much in promises, and that amount must be capped and funded. Public servants shouldn’t demand higher taxes to fund benefits more generous than those the average taxpayer gets. In the legislature, we’ve taken a 10% wage cut, cut our benefits, accepted an 80/20 co-pay split, and have no pension. With so many folks facing hard times and tough decisions, it’s only fair we cut ourselves first.
There’s much more, and in September we’ll have a whole new agenda. For the moment, I’m proud to be working in a legislature that is at last facing Michigan’s challenges squarely and setting the stage for a brighter future.
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Along with “return on investment”, “dashboards”, and “relentless positivity”, “tax fairness” is one of the trendiest phrases to catch fire in state government in recent memory. This philosophy is one of the primary drivers shepherding Senate Bill 331 through the legislature. The bill, introduced by Senator Joe Hune (R-Fowlerville), proposes to amend the Michigan Liquor Control Code to eliminate a 1.85% tax on the retail sale price of spirits for off premises consumption.
The bill would effectively eliminate a 33 year tax inequity levied disproportionately between off-premises and on-premises establishments. Currently, the Michigan Liquor Control Code divides retail establishments into two distinct categories: retailers that are licensed to sell alcohol to consumers for consumption off-premises, i.e. grocery stores, local liquor/variety stores, compared to establishments licensed to sell alcohol to consumers for consumption while on their premises like bars and restaurants.
Since 1978, an additional 1.85% tax has been levied on each bottle of liquor establishments like grocery and variety stores sell to consumers (originally to fund treatment referral programs for individuals identified as publicly intoxicated). Senate Bill 331 proposes to eliminate the tax and equalize what many proponents believe has been an unfair taxing environment. Many in the legislature hope that the new savings generated by eliminating the tax will be passed onto consumers, particularly benefitting businesses near Michigan’s borders that compete with neighboring states. The Michigan Business and Professional Association and the Michigan Food and Beverage Association have been publicly supportive of the legislation in both the House and Senate chambers.
The bill is currently on the House floor awaiting final action by the legislature.
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Don’t miss the FIRST EVER statewide SBA Small Business Outreach Tour! Are you a small business owner looking for tools to take your business to the next level? Do you need information, contacts, and resources to start your own business? Fifteen tour stops available.
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By Bonnie Bochniak
By Wayne Roberts
By Chuck Moss