Chamber-Backed PPE Tax Relief Package Would Help Businesses Retain EmployeesJuly 24, 2020
This week legislators began working on a Chamber-backed package of bills that would exempt purchases of PPE from the sales and use taxes and provide a refundable income tax credit to employers who submit their COVID-19 safety plans at the time of tax filing.
“Prior to the pandemic, no one could have predicted these costs,” said Brad Williams, vice president of Government Relations for the Chamber. “This legislation will ease that burden and help employers protect their employees, customers, and the public while also growing jobs. Our focus needs to remain on slowing the spread to keep businesses open and schools on track for in-person instruction as soon as possible so the economy can really start to recover.”
The legislation quickly picked up bipartisan sponsorship and co-sponsorship this week, as lawmakers look to help the economy recover from COVID-19.
Under the initial bill language, exemptions from the sales and use taxes would include masks, face shields, respirators, gloves, eye protection, and disinfectant products. COVID-19 safety plans would include:
- Enhanced workplace cleaning, employee screening, testing, and contact tracing.
- Promotion of remote work options.
- Compliance with the MI Safe Start Map and any applicable executive orders.
As initially drafted, here is how the refundable income tax credit would work:
- Employers who retain 100% of their employees (as of Feb. 1, 2020) would receive a 50% credit on the purchase price of PPE and/or disinfectant products.
- Employers who grow payrolls by 10% or more, and pay at least the average regional wage, would be eligible for a 100% credit on the purchase price of those products.
Currently, PPE used in manufacturing is exempt from the sales tax but requires tracking by employers and auditing by the Treasury Department.
With few scheduled legislative session days remaining in July and August, any significant movement on the bills would most likely come in September.