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Manufacturing Vision for Michigan 2023-2024
Tax Policy
Create a business climate which enables Michigan companies to compete in the global economy from their Michigan location
Michigan is a manufacturing state . With a total output of $ 99.60 billion ( 2019 ), manufacturing is the largest sector of the Michigan economy . The industry produces approximately 19 % of Michigan ’ s gross state product . With an average annual compensation of $ 82,019.87 ( 2019 ) per employee compared to just $ 48,632.03 for all other sectors , manufacturing delivers strong incomes for families .
The manufacturing sector brings additional dollars into the state and helps drive the state economy due to the sheer volume of goods exported to foreign countries ($ 55.35 billion , equal to 95.23 % of total goods exported from the state in 2018 ).
Unlike other sectors of the economy that compete with businesses down the street or across county or state lines , manufacturing competes globally with the lowest-cost operating locations in the world . State government must partner with manufacturers to ensure tax policies remain competitive against the ever-changing policies of locations in other states and around the world . This requires a regular comparison process to ensure tax rates , tax methods , tax adjudication or economic development incentives offered elsewhere are matched or improved upon in Michigan . Like the arsenal of democracy during World War II , manufacturing responded again to battle COVID-19 by producing personal protective equipment ( PPE ) and ventilators and develop vaccines for the people of Michigan and across the globe . As technological transformation changes the global automotive industry , Michigan must compete for new private sector investment , train its workers and provide a competitive business climate to empower the manufacturing sector to continue to lead the state ’ s economic future .
Michigan Manufacturers Say
“
State tax policy must reflect the manufacturing sector ’ s need to compete successfully in the global economy from a Michigan location . It must be competitive , efficient , understandable and reliable as companies make business decisions every day .
”
— Kelli Murphy , State & Local Tax Attorney , Office of Tax Counsel , Ford Motor Company , Detroit
Policy principles to support a competitive manufacturing sector . Michigan must :
■ Out-compete other states to attract and retain manufacturing investment .
■ Ensure tax policy continues to drive a strong manufacturing-based business climate .
■ Recognize that capital is mobile and tax policy influences investment and employment decisions .
■ Address challenges created by COVID-19 .
■ Promote free and fair international trade .
■ Ensure administrative agencies are efficient and responsive as effective partners in our efforts to compete in the global economy .
■ Protect Michigan taxpayers from negative impacts of federal tax law and policy changes .
■ Reduce property tax burdens on manufacturers .
■ Ensure protection of private business information in tax appeals .
■ Preserve ability to appropriately appeal property tax valuations .
■ Compete for future investments in electric and other alternative automotive technologies .
■ Compete with other states on relative total tax burden .
■ Support the growth of existing Michigan manufacturers ( capital access ).
■ Support Michigan ’ s tool , die and mold industry .
■ Reduce administrative burdens in the implementation of tax policy
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