Michigan House Eliminated $80 Million Tax Credit to Insurance Companies

Back in May 2016, the Michigan House of Representatives approved a measure which would eliminate an $80 million tax credit accidentally awarded to auto insurers. The elimination of this tax credit would be a major boost for the current and future state budgets, which have been impacted by lower than expected state revenue lawmakers told MLive. According to the latest estimates, state revenues are projected to be $174 million lower than expected this fiscal year and $159 million lower in 2017.  

Michigan Car Crash Lawyer

The notable drop in revenues for the state was the deciding factor that really brought the proposal of eliminating the tax credit to the forefront. “I think this creates a real incentive for folks to understand we just can’t have a corporate 80 million handout giveaway. And that needs to get fixed. So I think it puts a little more urgency on that,” House Appropriations Chairman Al Pscholka said. 

“It’s not retroactive, so it doesn’t take the money back, but they (auto insurers) can’t claim the credit in this year,” Gideon D’Assandro, spokesman for House Speaker Kevin Cotter said. The problem first began in the 2011-2012 legislative session, when the House approved what came to basically be an administrative charge for the Michigan Assigned Claims Plan. MLive reports that it was reassigned from the Secretary of State to the Michigan Automobile Insurance Placement Facility, which then opened a tax credit worth somewhere around $60-80 million for insurance companies. 

Representative Jim Townsend, a Democrat from Royal Oak believes that the tax credit aided auto insurers and at the same time hurt middle class families. “Passing these bills shows that Republicans are listening to our message of tax fairness, and understanding that we need to help the working families who are carrying an increasing share of the state’s tax burden,” Townsend said in a statement. 


Insurance companies can be tricky and it can be difficult to face them alone. If you or somebody you know has been involved in an accident and has been having a difficult time getting help from your insurance company, call The Michigan Law Firm, PLLC. Our attorneys are experienced in working with insurance companies in order to get our clients the best help available. Call us today, at 844.4MI.FIRM for a free consultation.