Michigan Democratic Gov. Whitmer vetoes PPP tax refund bills after leading small business summit

Michigan Gov. Gretchen Whitmer has vetoed bipartisan bills that would have exempted certain business purchases of personal protection equipment from the 6% state sales tax, after touting her administrations support of Michigan's small businesses two days earlier.

The bills would have offered businesses exemptions and refunds for sales or use tax paid on PPE retroactive to March 10, 2020, through 2021.

Rep. John Damoose, R- Harbor Springs, questioned the veto, saying, "This makes no sense. Our governor is proving to be one of the most anti-business governors in decades. ... This is inexcusable after what our businesses have faced over the last year and a half."

Michigan Chamber President and CEO Rich Studley tweeted he was “very disappointed, but not surprised” by the veto.

"Gov Whitmer routinely says one thing, but does another. She talks about working w/the Legislature, then doesn’t. She talks about ‘bipartisanship,’ but it only matters if lawmakers do what she wants. And she talks about business, but her #1 priority is expanding state govt," he posted.

Whitmer on Friday vetoed House Bills 4224 and 4225, saying she supports the idea as a grant instead of a tax credit so the expenditures would be eligible for the federal American Rescue Plan COVID-19 stimulus.

Earlier in the week, at a small business summit, Whitmer said: "As we continue Michigan’s economic jumpstart, we have an incredible opportunity to investment in people, infrastructure, and in the future of small businesses all across our state." 

The bills passed 102-7 in the House and 36-0 in the Senate.

In vetoing the measures, Whitmer said in a letter: "I encourage the Legislature to send me bills that would allow us to send these federal relief dollars to hard-working business owners who’ve kept their employees and customers safe over the past 15 months."

The state's Senate Fiscal Agency said the bills would reduce General Fund, School Aid Fund, and local tax revenue by "an unknown and potentially significant amount" depending on the sales cost and the number of Michiganders who implemented COVID-19 safety protocols.

– By Scott McClallen