Savings: about $ 42 a year per dog, for those who spend $ 700 a year on pet food. about average.
“These bills will save money not only for everyday pet owners, but also for individuals who have tax-free service animals,” said the bill’s sponsor, Tommy Bran, Wyoming, who is one of the bill’s sponsors.
“These accounts are important for people who love their companions.”
Based on statistics of pet ownership, the state expects sales of pet food will exceed $ 1.7 billion this year. Non-profit animal shelters in Michigan are eligible for the sales tax exemption, but they must apply for the exemption annually.
The release will cost the state about $ 100 million out of the $ 31 billion it collects annually in taxes and fees, the House of Representatives fiscal agency said.
Schools will suffer the biggest blow from tax losses, about $ 70.9 million out of the $ 16 billion School Aid Fund.
Michigan levies a tax on sales of cooked food, such as restaurant orders, but exempts the tax on food and “live animals purchased with the intent to be killed for human consumption.”
Most states levy a tax on sales of pet food, with the exception of Washington and Florida. which releases prescription food.
A spokesman for Pat Outman, R-Six Lakes, expressed concern about the money Michigan would lose from the offer.
“I have a problem with the tax and use tax exemption,” Outman said. “I’d rather approach lower incomes so people can provide for pets than attack our sales tax.”
Outman was referring to a Republican proposal, Senate Bill № 768, which reduces income tax rates to 3.9 percent from 4.25 percent for individuals and 6 percent for corporations. The plan also provides a tax credit of $ 500 for a child under 19 years of age.
The debate comes at a time when Republicans, who control the legislature and Democratic Gov. Whitmer, are fighting over tax cuts when the state treasury is full of money.
Lawmakers are debating how to spend a $ 7 billion state revenue surplus and another $ 7 billion in federal stimulus funds. On Wednesday, Whitmer called the Senate’s proposal to cut taxes “unsustainable” and that it would “undermine our ability to fund things like education, infrastructure and public safety.”
Whitmer proposed a smaller and more targeted tax cut as part of a huge $ 74.1 billion budget proposal that Republicans criticized.