Time running out to repeal, replace tax on services

By: The Associated Press
By: The Associated Press

Time is running out to repeal and replace a tax on services before it takes effect Saturday.

State senators are in Lansing waiting to see if a deal can be struck. State representatives didn't plan a session day Friday but are prepared to return to the Capitol if an agreement is reached.

Lawmakers and tax officials from Governor Jennifer Granholm's administration are talking, but it's still unclear if they'll settle differences over how to replace the 6 percent sales tax on services with another source of revenue.

Democrats say a surcharge on the state's main business tax must be permanent to avoid another budget crisis in a few years. Republicans want the surcharge to be temporary and smaller because they say it will hurt the economy.


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