Michigan Association of REALTORS®

Service Tax Repeal Update

As many of you know, the Michigan Association of REALTORS® joined with numerous other business groups in forming a coalition against the unfair 6% service tax created to balance the budget. The “Ax the Tax” Coalition bands together the business community in Michigan in an effort to repeal the job-killing service tax. Since the coalition’s formation, the legislature has begun moving to repeal the tax, along with identifying alternative revenue sources.

Earlier this month the House passed legislation in the form of House Bill 5408, repealing the service tax along with identifying a new revenue source to replace funds the service tax would have brought in. House Bill 5408 moved to the Senate, where it was amended to more evenly dispense the tax liability among large and small businesses. As passed, House Bill 5408 will affect those businesses that will pay the new Michigan Business Tax (MBT) by adding a surcharge. Highlights of the amended version of the bill include:

Cutting the MBT surcharge in the House-passed version from 32.9% to 13.85%
Uses excess state revenue from the personal property tax to pay down the surcharge amount
Sunset the proposed permanent surcharge on January 1st, 2011
Raise the cap on surcharge liability from $2 million to $5 million

The MAR supported a timely repeal of the tax, but urged a more broad based and equitable solution should the revenue be replaced. The Senate amended version of House Bill 5408 goes a long way in accomplishing this. Gov. Granholm has stated that she will not allow the repeal without revenue replacement. House Bill 5408 now heads back to the House for a vote. Should this bill pass the House, it will be sent off to the Governor’s office to either become enacted, or vetoed. Legislative leadership is in continuous discussions on how to resolve the issue. The service tax is scheduled to go into effect on Saturday if a change or delay is not passed this week.

The MAR Advocacy team is in continuing talks with legislative leaders to make certain that the real estate industry interests are protected from any new tax solution.

The Michigan Department of Treasury has posted a Michigan Business Tax (MBT) Estimator to its MBT Web site, located at www.michigan.gov/mbt. This new tool allows businesses and tax professionals to estimate a business' future MBT liability. The new business tax structure takes effect January 1, 2008. The Estimator is housed on a secure, encrypted site, which does not track the user's identity or retain data. In addition, several more Frequently Asked Questions have been posted to the MBT site, the fifth FAQ update since the site was activated in August. The Department continues to receive new questions from the business community and will continue to issue responses and other guidance. In addition, Treasury has posted a new alphabetical list of taxable and exempt services under the expanded Use Tax.

Leave the interest payments behind this holiday season, with the Michigan Association of REALTORS® Visa® Platinum Card, now offering 0% APR for twelve billing cycles*! Wrap up great holiday memories with this unique card, knowing you’ll pay no interest until next winter. The Michigan Association of REALTORS® Visa is perfect for holiday shopping, but you need to switch now to save. Plus, you’ll benefit our organization and earn great rewards with every purchase!

The Michigan Association of REALTORS® Visa® Platinum Card also provides great benefits, including:

* No annual fee
* Your choice of benefits and rewards
* A percentage of every purchase goes directly to the Michigan Association of REALTORS®

With the help of McClelland & Anderson, we are taking the most commonly asked questions from our legal hotline and putting them in e-news. We will be featuring a different question each issue.

QUESTION: My buyer client made an offer on a house listed by another company. The listing agent told me that he had called his seller and that the seller had accepted my client’s offer. I never received the written acceptance and I have since found out that the seller entered into a contract with another buyer. My buyer believes that he should get the house because of the verbal acceptance of his offer. Is he correct?

ANSWER: NO. The statute of frauds (MCL 566.108) requires that a contract for the sale of real estate be in the form of a signed written document in order to be enforceable. Since the so-called acceptance came through verbal communications between the seller, the listing agent, and the buyer’s agent, and was never reduced to a signed writing, the contract is unenforceable.

Use http://www.letssaythanks.com/Home1280.html to send a free printed postcard to U.S. military personnel stationed overseas. The Web site takes you through three easy steps and lets you enter a personalized message. This site is part of Xerox’s Let’s Say Thanks program.

This two-day conference, taking place January 17 – 18 at the Amway Grand Plaza in downtown Grand Rapids, is designed to assist REALTORS® in developing and recognizing the skills and performance of local and statewide leadership by translating positive strategies into winning business results. All local association leaders are invited and encouraged to attend. Speakers include Patrick Anderson, Susan Stratton and Dick Gaylord.