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| Mi35. Will public libraries receive any moneys from the Michigan Business Tax? There was a provision in the Single Business Tax Act that directly funded public libraries, will this continue under the MBT?
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There is no provision in the Michigan Business Tax Act that directly funds
public libraries, nor did such a provision exist in the Single Business Tax Act.
At the time of its repeal, the revenue generated from the SBT was distributed to
the General Fund, with no amounts earmarked for particular programs. The revenue
generated from the MBT will be distributed to the School Aid Fund and General
Fund per MCL 208.1515, again with no amounts earmarked for particular programs.
The State Revenue Sharing program distributes sales tax collected by the State
of Michigan to local governments as unrestricted revenues. The distribution of
funds is authorized by the State Revenue Sharing Act, Public Act 140 of 1971, as
amended (MCL 141.901).
As part of the legislation associated with the adoption of the Single Business
Tax in 1975, Michigan exempted business inventories from the property tax. To
hold local units harmless for this change, a portion of SBT revenue at that time
was earmarked for distribution to local units through the revenue sharing
process. In 1996 Public Act 342 changed both the basis on which the funds are
distributed and the source of revenue-sharing funds, removing income tax and SBT
revenue and replacing it with additional sales tax revenue.
Generally, revenue distributed under the Act is unrestricted: Local units have
complete control over how the funds are used. However, local units that collect
property taxes for eligible authorities were required under Section 912a of the
Revenue Sharing Act to remit a portion of any payments received under the Act to
the eligible authorities for which they collected taxes, generally the amount
received by the eligible authority for the 1997-1998 state fiscal year. This
section of the State Revenue Sharing Act expired September 30, 2007.
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