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SBT Tax Rate Tables

Public Act (PA) 115 of 1999 reduced the SBT tax rate by 0.1% per year beginning January 1, 1999. This will effectively phase out the SBT over a 23-year period. To protect state programs and services in future years, the Act includes a unique provision. If the State's Budget Stabilization Fund (Rainy Day Fund) balance for a fiscal year falls below $250 million, the next calendar year's reduction will not take place. Future rate reductions will continue once the balance again exceeds $250 million. The State's Budget Stabilization Fund (BSF) balance for each fiscal year can be found in the Comprehensive Annual Financial Report (SOMCAFR), published by the Office of Financial Management (http://www.michigan.gov/budget/0,1607,7-157-13406---,00.html). The BSF reported a balance of $145.2 million as of September 30, 2002. A chart of blended rates, which are required for fiscal-year-end returns, is included below for tax years ending December 1998 through December 2002.

Changes to the Tax Rate for Tax Years
      Ending 12/1998 Through 12/1999

        Year End Effective 
Tax Rate

12/1998

2.3%

  1/1999

2.2916

  2/1999

2.2833

  3/1999

2.275

  4/1999

2.2666

  5/1999

2.2583

  6/1999

2.25

  7/1999

2.2416

  8/1999

2.2333

  9/1999

2.225

10/1999

2.2166

11/1999

2.2083

12/1999

2.2

Changes to the Tax Rate for Tax Years
Ending 01/2000 Through 12/2000

Year End

Effective
Tax Rate

  1/2000

2.1916

  2/2000

2.1833

  3/2000

2.175

  4/2000

2.1666

  5/2000

2.1583

  6/2000

2.15

  7/2000

2.1416

  8/2000

2.1333

  9/2000

2.125

10/2000

2.1166

11/2000

2.1083

12/2000

2.1

Changes to the Tax Rate for Tax
Years Ending 1/2001 Through 12/2001

Year End

Effective
Tax Rate

  1/2001

2.0916%

  2/2001

2.0833

  3/2001

2.075

  4/2001

2.0666

  5/2001

2.0583

  6/2001

2.05

  7/2001

2.0416

  8/2001

2.0333

  9/2001

2.025

10/2001

2.0166

11/2001

2.0083

12/2001

2.0

Changes to the Tax Rate for Tax
Years Ending 1/2002 Through 12/2002

Year End

Effective
Tax Rate

  1/2002

1.9916%

  2/2002

1.9833

  3/2002

1.975

  4/2002

1.9666

  5/2002

1.9583

  6/2002

1.95

  7/2002

1.9416

  8/2002

1.9333

  9/2002

1.925

10/2002

1.9166

11/2002

1.9083

12/2002

1.9

Changes to the Tax Rate for Tax
Years Ending 1/2003 Through 12/2003

Year End

Effective
Tax Rate

 2003

1.9 No Change

Changes to the Tax Rate for Tax
Years Ending 1/2004 Through 12/2004

Year End

Effective
Tax Rate

2004

1.9 No Change

Changes to the Tax Rate for Tax
Years Ending 1/2005 Through 12/2005

Year End

Effective
Tax Rate

2005

1.9 No Change

 

These charts should not be used if the tax year is less than 12 months; instead, a blended rate using the number of months at the old rate and the number of months at the new rate must be calculated according to the following example.

Example:       8-month return, tax year from October 2000 to May 2001:

                      3 months   x   2.1% (old rate)   =   6.3%
                      5 months   x   2.0% (new rate)  =   10.0%

                      6.3% + 10.0% = 16.3%
                      16.3% / 8 months = 2.0375% tax rate

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