The controversial 6% tax on investment advice was repealed in a late-night session of the state legislature.
Michigan’s controversial 6% tax on investment advice, along with about two dozen other random services, was repealed over the weekend during the state legislature’s most recent late-night session, according to published reports.
The service tax, which was introduced following a late-night, closed-door budget negotiation in October, was expected to generate more than $750 million annually, $16.8 million of which would have come from a tax on non-discretionary financial advice.
The funding gap was filled by an increase in Michigan’s main business tax.
The service tax sparked widespread opposition, including efforts by a Lansing-based coalition of more than 60 business and community organizations to fight the tax through a signature petition drive that would have placed the issue on the ballot in November.
The state legislature officially repealed the service tax on Saturday, Dec. 1, the same day it was originally scheduled to take effect.
The timing of the repeal created a new set of challenges for the state that must now figure out a way to rebate businesses or consumers that might have paid the service tax prior to the repeal, according to the Detroit Free Press.
The paper reported that the demise of the tax “was greeted with a collective sigh of relief at the Capitol, which has increasingly been viewed around the state as a dysfunctional workplace.”
