Great Lakes Wire

Michigan’s National Federation of Independent Business (NFIB) has voiced disappointment after the state House passed HB 4961, legislation that would separate certain provisions of the federal tax code from Michigan’s state tax laws. The bill, part of the One Big Beautiful Bill (OBBB), is expected to reduce tax savings for small businesses on equipment and property purchases.

Amanda Fisher, NFIB Michigan State Director, commented on the situation: “While we know that this action is due to the unfortunate reality that the Governor and Senate Majority Leader are holding the state budget hostage in order to get additional revenue for roads, we are, nonetheless, dismayed that small businesses got caught in the middle.”

The NFIB highlighted Section 179a as a significant concern. This section allows businesses to deduct the full cost of qualifying equipment or property in the year it is purchased rather than depreciating it over time. Earlier this year, the federal deduction cap under Section 179 was raised from $1.25 million to $2.5 million.

Fisher further stated: “Unfortunately, the tax savings small businesses experience on their federal taxes will be wiped out when filing their state taxes, as well as making state taxes more confusing.”

The NFIB has played a role in advocating for increases in Section 179a expensing caps at the congressional level.