Michigan Retailers: Sales Tax Increase For Roads Would Kill Jobs

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Tuesday, February 12, 2013 Michigan Retailers: Sales Tax Increase For Roads Would Kill Jobs LANSING - The Michigan Retailers Association has come out strongly against proposals to increase the sales tax to fund road repairs, saying it would be devastating to the retail industry and the state's economic recovery. In a statement released Monday, the association said its president, James Hallan, wrote a letter to all senators, who have been presented a plan to gain revenue for roads includes a ballot proposal asking voters to increase sales tax to 8 percent, stating the increase in sales tax would push consumers to purchase more merchandise online from out-of-state retailers not required to charge the current 6 percent sales or use tax. Sen. Roger Kahn (R-Saginaw Township), chair of the new Senate Infrastructure Modernization Committee that will be the first group to take on the transportation funding issue this term, said he had not yet seen the statement by the association and therefore could not provide a response to it. Hallan told Gongwer News Service that if recent, so-called main street fairness legislation (HB 4202 , HB 4203 ) was passed, the association would still be against an increase in the sales tax. "Certainly without the main street fairness legislation, it exacerbates the problem," he said. One scenario to raise transportation revenues is to pass something resembling Governor Rick Snyder's call for a gasoline tax equivalent to 33 cents per gallon and a 60 percent increase in vehicle registration fees on light vehicles as well as a 25 percent registration hike on heavy trucks. But then if voters approved an increase in the sales tax from 6 percent to 8 percent, those gasoline tax and vehicle registration fee increases would disappear. Hallan said thousands of retail jobs have been lost because of the "advantage" out-of-state, online retailers, like Amazon, have. "Worse, the number of lost jobs and the amount of lost tax revenues are accelerating as more consumers shop online," he said. "Adding another one or two cents to the sales tax would supercharge those damaging trends." Hallan also said the sales tax increase would put Michigan at the eighth-highest state-based sales tax in the nation (editor's note: this story changed to correct how increase in sales tax would affect Michigan's ranking among the states). "We support the governor's plan that the roads need repair and should be done with an increase in user fees," he said. Lance Binoniemi, vice president of government affairs for the Michigan Infrastructure and Transportation Association, said the sales tax alternative could have drawbacks, although there would be net job creation in repairing the state's infrastructure issues, no matter how it is funded. "I think the proposal the Senate is introducing really gives voters the option of how they want to raise revenues," Binoniemi said. "But the sales tax component is a nontraditional way to raise money for infrastructure." This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com Author: Staff Writer Source: Gongwer News Service

Source: http://www.mitechnews.com/articles.asp?id=15362

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