May 8, 2007, Introduced by Reps. Sheen, Stakoe, Caswell, Palmer, Moore, Hoogendyk, Booher, Shaffer, Knollenberg, Meekhof, Marleau, Nofs, Ball, Meltzer, Agema, LaJoy, Garfield, Elsenheimer, Casperson, Robertson, Emmons, Wenke, Calley, Rick Jones, Stahl, Steil, Horn, Pavlov, Acciavatti, David Law, Gaffney, Palsrok, Opsommer, Moss, Schuitmaker and Pastor and referred to the Committee on Tax Policy.
A joint resolution proposing an amendment to the state
constitution of 1963, by amending sections 3, 7, 8, 10, and 11 of
article IX and by adding section 43 to article IX, to eliminate
property tax on personal property, to eliminate the state income
tax, to revise the sales tax rate and the use tax rate, to prohibit
state taxation of certain real property, to prohibit the imposition
of new state taxation of business activity, and to revise
distribution of revenue to local units of government.
Resolved by the Senate and House of Representatives of the
state of Michigan, That the following amendment to the state
constitution of 1963, to eliminate property tax on personal
property, to eliminate the state income tax, to revise the sales
tax rate and the use tax rate, to prohibit state taxation of
certain real property, to prohibit the imposition of new state
taxation of business activity, and to revise distribution of
revenue to local units of government, is proposed, agreed to, and
submitted to the people of the state:
ARTICLE IX
Sec. 3. The legislature shall provide for the uniform general
ad valorem taxation of real and, prior to January 1, 2009, tangible
personal property not exempt by law except for taxes levied for
school operating purposes. After December 31, 2008, tangible
personal property shall not be subject to taxation in this state
and no tax shall be levied by this state on real property that is
business property, as defined by law. The legislature shall provide
for the determination of true cash value of such property; the
proportion of true cash value at which such property shall be
uniformly assessed, which shall not, after January 1, 1966, exceed
50 percent; and for a system of equalization of assessments. For
taxes levied in 1995 and each year thereafter, the legislature
shall provide that the taxable value of each parcel of property
adjusted for additions and losses, shall not increase each year by
more than the increase in the immediately preceding year in the
general price level, as defined in section 33 of this article, or 5
percent, whichever is less until ownership of the parcel of
property is transferred. When ownership of the parcel of property
is transferred as defined by law, the parcel shall be assessed at
the applicable proportion of current true cash value. The
legislature may provide for alternative means of taxation of
designated real and, prior to January 1, 2009, tangible personal
property in lieu of general ad valorem taxation. Every tax other
than the general ad valorem property tax shall be uniform upon the
class or classes on which it operates. A law that increases the
statutory limits in effect as of February 1, 1994 on the maximum
amount of ad valorem property taxes that may be levied for school
district operating purposes requires the approval of 3/4 of the
members elected to and serving in the Senate and in the House of
Representatives.
Sec.
7. No Prior to January 1,
2009, no income tax graduated
as to rate or base shall be imposed by the state or any of its
subdivisions. Beginning January 1, 2009, no income tax shall be
levied in this state.
Sec. 8. Except as provided in this section, the Legislature
shall not impose a sales tax on retailers at a rate of more than 4%
of their gross taxable sales of tangible personal property and,
beginning January 1, 2009, services.
Beginning May 1, 1994, the sales tax shall be imposed on
retailers at an additional rate of 2% of their gross taxable sales
of tangible personal property and, beginning January 1, 2009,
services not exempt by law and the use tax at an additional rate of
2%.
The Before January 1, 2009,
the proceeds of the sales and use
taxes imposed at the additional rate of 2% shall be deposited in
the state school aid fund established in section 11 of this
article. Beginning January 1, 2009, the proceeds of the sales and
use taxes imposed at the additional rate of 2% on tangible personal
property only, but not prescription drugs for human use or food for
human consumption, shall be deposited in the state school aid fund
established in section 11 of this article. The allocation of sales
tax revenue required or authorized by sections 9 and 10 of this
article does not apply to the revenue from the sales tax imposed at
the additional rate of 2%.
Beginning January 1, 2009, the sales tax shall be imposed at
an additional rate of 3.5% on the gross taxable sales of tangible
personal property and services not exempt by law and the use tax at
an additional rate of 3.5%.
No
After January 1, 1975 and
prior to January 1, 2009, no
sales
tax or use tax shall be charged or collected from and after
January
1, 1975 on the sale or use of
prescription drugs for human
use, or on the sale or use of food for human consumption except in
the case of prepared food intended for immediate consumption as
defined by law. This provision shall not apply to alcoholic
beverages.
Beginning January 1, 2009, the sales tax or use tax shall be
charged and collected on the sale or use of prescription drugs for
human use and on the sale or use of food for human consumption.
Sales and use tax shall only be applied to first purchases at
retail, as defined by law. Sales at retail shall not include
business-to-business sales, as defined by law.
Sec.
10. Fifteen percent of all taxes the tax imposed on
retailers on taxable sales at retail of tangible personal property
at
a the rate of not more than 4% shall be used
exclusively for
assistance to townships, cities and villages, on a population basis
as provided by law. Beginning January 1, 2009, 31.0669% of the tax
imposed on retailers on taxable sales at retail of tangible
personal property at the rate of 4% shall be used exclusively for
assistance to counties, townships, cities, and villages, on a
population basis as provided by law. However, beginning January 1,
2009, the distribution under this section shall not apply to the
tax imposed at the rate of 4% on the taxable sales at retail of
prescription drugs for human use or on the sale or use of food for
human consumption. In determining population the legislature may
exclude any portion of the total number of persons who are wards,
patients or convicts in any tax supported institution.
Sec. 11. There shall be established a state school aid fund
which shall be used exclusively for aid to school districts, higher
education, and school employees' retirement systems, as provided by
law.
Sixty percent of all taxes imposed at a the rate of 4% on
retailers on taxable sales at retail of tangible personal property,
100% of the proceeds of the sales and use taxes imposed at the
additional rate of 2% provided for in section 8 of this article,
and other tax revenues provided by law, shall be dedicated to this
fund. However, beginning January 1, 2009, the distribution under
this section shall not apply to the tax imposed at the rate of 4%
or to the tax imposed at the additional rate of 2%, on the taxable
sales at retail of prescription drugs for human use or on the sale
or use of food for human consumption, or to the tax imposed at the
additional rate of 2% on services that were not subject to sales or
use tax prior to January 1, 2009. Payments from this fund shall be
made in full on a scheduled basis, as provided by law. Beginning in
the 1995-96 state fiscal year and each state fiscal year after
1995-96, the state shall guarantee that the total state and local
per pupil revenue for school operating purposes for each local
school district shall not be less than the 1994-95 total state and
local per pupil revenue for school operating purposes for that
local school district, as adjusted for consolidations, annexations,
or other boundary changes. However, this guarantee does not apply
in a year in which the local school district levies a millage rate
for school district operating purposes less than it levied in 1994.
Sec. 43. This state shall not impose a general business tax
other than a tax created by the joint resolution that added this
section and any tax in existence from January 1, 2007 through the
effective date of the joint resolution that added this section. The
rate of any general business tax shall only be increased with the
approval of a majority of the qualified electors of this state.
Resolved further, That the foregoing amendment shall be
submitted to the people of the state at the next general election
in the manner provided by law.