McGuinty Weights in on
Michigan Business Tax
Seeks Support of Michigan Governor for Reciprocity
for Ontario Truckers, Auto Parts Makers
(Toronto, March 14, 2008) -- “In the interests
of our continued success as trading partners,” Ontario premier Dalton
McGuinty is encouraging his counterpart in Michigan, Governor Jennifer Granholm,
to “do everything in (her) power to see that the Michigan Business Tax Act
(MBT) is appropriately amended” to restore tax reciprocity between the two
jurisdictions or risk “(impeding) trade and worsen current economic
difficulties.”
McGuinty’s comments are contained in a letter to
the Governor, in which the Premier calls the new MBT “a tax barrier to
cross-border trade that affects at least two of Ontario’s key industrial
sectors: automotive parts and trucking, both of which are major suppliers to
Michigan’s industry.”
According to McGuinty “cross-border trade
between Ontario and Michigan has flourished, in part, because of the elimination
of taxes on foreign companies that do not have a permanent establishment in our
respective jurisdictions. It is a long established practice in Ontario not to
tax Michigan-based companies that do not have a permanent establishment in our
province.” And, he added, “nor does Ontario have a gross receipts
tax,” which is a key component of the MBT.
David Bradley, president of the Ontario Trucking
Association, whose association, along with the Automotive Parts Manufacturers
Association, has been leading the charge to get the MBT changed, welcomed the
Premier’s intervention. “This is precisely the kind of message that
needs to be conveyed to the Michigan government; that the Ontario government is
watching the situation closely and is very interested in an outcome that treats
Ontario companies the same way Michigan companies are treated
here.”
OTA and the APMA have been working closely with the
Canadian Consulate General in Detroit. Last month, a bill was passed in the
Republican controlled state senate to restore tax reciprocity, and the
associations are hopeful that an identical bill will soon be introduced in the
House of Representatives which is controlled by the Democrats. Governor Granholm
who is a Democrat, will ultimately have to sign off on any legislation.
OTA estimates that if imposed on Canadian trucking
companies, the MBT could amount to an additional tax of $1,000 per truck per
year. “When the industrial heartland of North America is already reeling
from slower economic growth, off-shore competition and a thickening of the
Canada-US border, this tax is not only unfair and inconsistent with
international tax norms, it only serves to worsen an already dim economic
situation for the region,” says Bradley.
© 1995 -
2008, Ontario Trucking Association
555 Dixon Road, Toronto, Ontario
M9W
1H8
Tel: (416) 249-7401 | Fax: (416) 245-6152
Email:
info@ontruck.org