Just days after her Michigan "State of the State" address to the Michigan Legislature, a proposal to tax services by 2% is gaining momentum. We are already allowing foreign competition ruin our Detroit/Michigan manufacturing business, so the proposal to fix the State's budget problem . . . tax the service industry. Our service sector, especially housing, is what is keeping this state alive. Tax it and kill it. It is hard enough to sell homes in Metro Detroit, the last thing needed to discuss is a tax on real estate services, whether I pay it "our-of-pocket" or pass it on to the seller/buyer. Michigan real estate sales are already being taxed by the Headly Amendment of 1994. Michigan home sellers pay .75% of the sales price to the State. That is $1,500 on an average sale of $200,000. So now, for example, if the real estate fee of 6% split by two Brokers is $12,000, each Broker will be responsible to submit the 2% tax on the gross $6,000 received. That is $120 each or $240 total. Who pays it and how? The listing Broker is technically paid by the seller, and then the listing broker pays the cooperating agent. Will the listing Broker be responsible for the tax if the cooperating broker does not file properly? Have the seller pay it in addition to the transfer tax? Have the buyer pay as a sales tax for buying a house, just like buying a car? All I know, it is getting more difficult to produce the bottom-line to support my business, my family, etc.. Tax my commissions in addition to heavy self-employment taxes most Realtors alread pay??? 
As much it would be good to say, "Great, tax services, just exempt real estate due to it already being taxed." That is not a fair argument. The costs of services will rise and people will make a choice then to not utilize those services. If those services have less money to spend in the economy, the tax revenue from regular sales taxes will plummet. Michigan needs to wake up and provide a tax system that is "investment based". Meaning, create a tax code that is win-win. We need to "fire up" this economy, not give incentives to "not spend money".