Michigan Association of REALTORS®

Weeks of intense negotiation came to fruition last week as the Michigan legislature passed Senate Bill 94 to create the Michigan Business Tax (MBT) and replace the old Single Business Tax (SBT) that was scheduled for repeal on December 31st. The new business tax, like the existing SBT, will be imposed on businesses with annual gross receipts in excess of $350,000. The new structure is composed of a modified gross receipts tax (at a rate of 0.8%) and a business income tax (at a rate of 4.95%). The Department of Treasury estimates that the new tax will replace all $1.9 billion currently brought in by the SBT.

The Michigan Association of REALTORS® struck several victories in the creation of this new tax structure to keep taxation on real estate brokerages low. The Governor’s earliest proposals brought a 900% tax increase on our industry. But, successful negotiations brought key amendments so that, at worst, we are brought back in line with the rest of the business community. These important policy points included:

changing the tax base to eliminate taxation on “net worth”
subtracting agent and cooperating brokerage commissions from the gross receipts base calculation
providing “compensation credit” to a broker for all agents’ commission payments at a rate of .37%
(note that this is limited to 65% of that business’ total tax liability)
eliminating double taxation of profits for those brokerages organized as Limited Liability Corporations
establishing a cap and rebate trigger at 2,398,000,000 setting the amount of taxes that the MBT can generate before refunding tax payers.

The new MBT passed both the Senate and the House with large majorities in each chamber. Bill drafters are currently working on a few necessary technical and stylistic corrections within the legislation and there will likely be future bills to address unforeseen impacts. However, the new MBT should soon be on its way to the Governor for her signature to become law. Given the quarterly reporting requirements of many Michigan businesses at the end of June, it will most likely be signed during the month of July.

The Michigan Association of REALTORS® appreciates the hard work of all of the Senators and Representatives that made up the bi-partisan workgroup to draft this “MBT.” Additional thanks go out to the many members that utilized the “tax calculator” to give staff the best indications of how the MBT may impact our industry. As with any complex law, we will be monitoring the law’s impact and ask that you do the same. As the law is established, we will provide a new calculator on the website one last time and ask that you put it to use to keep us best informed on any major unforeseen consequences that the tax may impose on your businesses. Please stay tuned to the MAR Web site (www.mirealtors.com) and MAR publications for more details and the latest information on this new form of business tax.

Please remind your members that the deadline for MAR Director candidate filing is Friday, July 13, 2007.

Anyone wishing to run for MAR Director, or anyone who has questions, should contact Brian Westrin at the MAR office, 517-372-8890, ext. 558.

'Open House Bandits' arrested in Missouri

Police in Berkeley, Calif., reported today that a couple has been arrested as suspects in a cross-country theft spree that targeted real estate agents, their offices, and open houses.

Paul McClung, 30, and Carol Ann Chapman, 59, were arrested in Missouri, police reported today. The duo, dubbed "Open House Bandits" by a television news station, allegedly told real estate agents that they were mother and son and that they sought to pay cash for homes. Berkeley Police Lt. Wes Hester confirmed the couple's arrest.

story continued...

Read More on Protection from ID Theft here.

Read More on Safety at Open Houses here.

Local Executives Join Together to Share Ideas and Learn

Over 45 association executives and staff from across the state met last week for the annual Michigan REALTOR® Association Executives Council summer seminar in Boyne. This education event featured dynamic speakers and networking opportunities along with a RPAC auction. The auction raised $2,700. Highlighting the event were Marcus Wally, MBA, GRI, CIPS, TRC of Coldwell Banker Walter Williams Realty, Adorna Carroll, ABR, ABRM, GRI, SRS, SRES, PMN, ePRO, of Dynamic Directions and Tom Kotzian, JD, GRI, Southfield. Topics included leadership, diversity, managing volunteers and staff and broker issues. All of the speakers emphasized the importance of understanding the business climate and issues facing their REALTOR® members.

Adorna Carroll, broker-owner and NAR education specialist told the group “If you want your association to be valuable to me, you need to know how I make a living and what my business challenges are and structure your services to meet my needs.”

This annual seminar provides a unique environment for the exchange of ideas between local associations, who often must join together in providing programs and services despite the competitive nature of their business. In 2008, the MRAEC hopes to create a regional event with association executives from Ohio.

In order to ensure that all members receive CE credit for the 2007 legal update, MAR asks that you contact Andrea Bates directly after you have confirmed a date with MAR counsel McClelland & Anderson. You have two options: you can sponsor the legal update by completing a sponsorship application and course approval with DLEG, or you can offer the legal update as a MAR sponsored CE program. Our goal is that no legal update program be offered without CE credit for the participants — so please select the option that works best for you. For MAR sponsored courses, MAR will provide customized CE certificates to you prior to your course and will report attendees to DLEG. You must submit a participant roster with name and license number to Andrea within 24 hours after the legal update is held.

The 2007 legal update materials, created by MAR counsel McClelland & Anderson, are now available online. On the link below, you’ll find the latest, downloadable legal update materials. You may download the materials or provide the link to your members.