Bill Text: MI HB4452 | 2015-2016 | 98th Legislature | Introduced

---

Bill Title: Individual income tax; property tax credit; treatment of senior citizens and income qualifier phaseout; restore and increase. Amends secs. 520 & 522 of 1967 PA 281 (MCL 206.520 & 206.522).

Spectrum: Partisan Bill (Democrat 18-0)

Status: (Introduced - Dead) 2015-04-16 - Printed Bill Filed 04/16/2015 [HB4452 Detail]

Download: Michigan-2015-HB4452-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4452

 

April 15, 2015, Introduced by Reps. Greig, Faris, Darany, Chirkun, Chang, Plawecki, Pagan, Smiley, Moss, Cochran, Zemke, Wittenberg, Banks, Gay-Dagnogo, Brunner, Irwin, Brinks and Townsend and referred to the Committee on Tax Policy.

 

      A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

by amending sections 520 and 522 (MCL 206.520 and 206.522),

 

section 520 as amended by 2011 PA 273 and section 522 as amended

 

by 2013 PA 206.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

 1        Sec. 520. (1) Subject to the limitations and the definitions

 

 2  in this chapter, a claimant may claim against the tax due under

 

 3  this part for the tax year a credit for the property taxes on the

 

 4  taxpayer's homestead deductible for federal income tax purposes

 

 5  pursuant to section 164 of the internal revenue code, or that

 

 6  would have been deductible if the claimant had not elected the

 

 7  zero bracket amount or if the claimant had been subject to the

 

 1  federal income tax. The property taxes used for the credit

 

 2  computation shall not be greater than the amount levied for 1 tax

 

 3  year. An owner is not eligible for a credit under this section if

 

 4  the taxable value of his or her homestead excluding the portion

 

 5  of a parcel of real property that is unoccupied and classified as

 

 6  agricultural for ad valorem tax purposes in the year for which

 

 7  the credit is claimed is greater than $135,000.00. As used in

 

 8  this subsection, "taxable value" means that value determined

 

 9  under section 27a of the general property tax act, 1893 PA 206,

 

10  MCL 211.27a.

 

11        (2) A person who rents or leases a homestead may claim a

 

12  similar credit computed under this section and section 522 based

 

13  upon 17% of the gross rent paid for tax years before the 1994 tax

 

14  year, or 20% of the gross rent paid for tax years after the 1993

 

15  tax year. A person who rents or leases a homestead subject to a

 

16  service charge in lieu of ad valorem taxes as provided by section

 

17  15a of the state housing development authority act of 1966, 1966

 

18  PA 346, MCL 125.1415a, may claim a similar credit computed under

 

19  this section and section 522 based upon 10% of the gross rent

 

20  paid.

 

21        (3) If the credit claimed under this section and section 522

 

22  exceeds the tax liability for the tax year or if there is no tax

 

23  liability for the tax year, the amount of the claim not used as

 

24  an offset against the tax liability shall, after examination and

 

25  review, be approved for payment, without interest, to the

 

26  claimant. In determining the amount of the payment under this

 

27  subsection, withholdings and other credits shall be used first to

 

 1  offset any tax liabilities.

 

 2        (4) If the homestead is an integral part of a multipurpose

 

 3  or multidwelling building that is federally aided housing or

 

 4  state aided housing, a claimant who is a senior citizen entitled

 

 5  to a payment under subsection (2) may assign the right to that

 

 6  payment to a mortgagor if the mortgagor reduces the rent charged

 

 7  and collected on the claimant's homestead in an amount equal to

 

 8  the tax credit payment provided in this chapter. The assignment

 

 9  of the claim is valid only if the Michigan state housing

 

10  development authority, by affidavit, verifies that the claimant's

 

11  rent has been so reduced.

 

12        (5) Only the renter or lessee shall claim a credit on

 

13  property that is rented or leased as a homestead.

 

14        (6) A person who discriminates in the charging or collection

 

15  of rent on a homestead by increasing the rent charged or

 

16  collected because the renter or lessee claims and receives a

 

17  credit or payment under this chapter is guilty of a misdemeanor.

 

18  Discrimination against a renter who claims and receives the

 

19  credit under this section and section 522 by a reduction of the

 

20  rent on the homestead of a person who does not claim and receive

 

21  the credit is a misdemeanor. If discriminatory rents are charged

 

22  or collected, each charge or collection of the higher or lower

 

23  payment is a separate offense. Each acceptance of a payment of

 

24  rent is a separate offense.

 

25        (7) A person who received aid to families with dependent

 

26  children, state family assistance, or state disability assistance

 

27  pursuant to the social welfare act, 1939 PA 280, MCL 400.1 to

 

 1  400.119b, in the tax year for which the person is filing a return

 

 2  shall have a credit that is authorized and computed under this

 

 3  section and section 522 reduced by an amount equal to the product

 

 4  of the claimant's credit multiplied by the quotient of the sum of

 

 5  the claimant's aid to families with dependent children, state

 

 6  family assistance, and state disability assistance for the tax

 

 7  year divided by the claimant's total household resources. The

 

 8  reduction of credit shall not exceed the sum of the aid to

 

 9  families with dependent children, state family assistance, and

 

10  state disability assistance for the tax year. For the purposes of

 

11  this subsection, aid to families with dependent children does not

 

12  include child support payments that offset or reduce payments

 

13  made to the claimant.

 

14        (8) A credit under subsection (1) or (2) shall be reduced by

 

15  10% for each claimant whose total household resources exceed

 

16  $41,000.00 $73,650.00 and by an additional 10% for each increment

 

17  of $1,000.00 of total household resources in excess of

 

18  $41,000.00.$73,650.00.

 

19        (9) If the credit authorized and calculated under this

 

20  section and section 522 and adjusted under subsection (7) or (8)

 

21  does not provide to a senior citizen who rents or leases a

 

22  homestead that amount attributable to rent that constitutes more

 

23  than 40% of the total household resources of the senior citizen,

 

24  the senior citizen may claim a credit based upon the amount of

 

25  total household resources attributable to rent as provided by

 

26  this section.

 

27        (10) A senior citizen whose gross rent paid for the tax year

 

 1  is more than the percentage of total household resources

 

 2  specified in subsection (9) for the respective tax year may claim

 

 3  a credit for the amount of rent paid that constitutes more than

 

 4  the percentage of the total household resources of the senior

 

 5  citizen specified in subsection (9) and that was not provided to

 

 6  the senior citizen by the credit computed pursuant to this

 

 7  section and section 522 and adjusted pursuant to subsection (7)

 

 8  or (8).

 

 9        (11) The department may promulgate rules to implement

 

10  subsections (9) to (15) and may prescribe a table to allow a

 

11  claimant to determine the credit provided under this section and

 

12  section 522 in the instruction booklet that accompanies the

 

13  respective income tax or property tax credit forms used by

 

14  claimants.

 

15        (12) A senior citizen may claim the credit under subsections

 

16  (9) to (15) on the same form as the property tax credit permitted

 

17  by subsection (2). The department shall adjust the forms

 

18  accordingly.

 

19        (13) A senior citizen who moves to a different rented or

 

20  leased homestead shall determine, for 2 tax years after the move,

 

21  both his or her qualification to claim a credit under subsections

 

22  (9) to (15) and the amount of a credit under subsections (9) to

 

23  (15) on the basis of the annualized final monthly rental payment

 

24  at his or her previous homestead, if this annualized rental is

 

25  less than the senior citizen's actual annual rental payments.

 

26        (14) For a return of less than 12 months, the claim for a

 

27  credit under subsections (9) to (15) shall be reduced

 

 1  proportionately.

 

 2        (15) The total credit allowed by this section and section

 

 3  522 shall not exceed $1,200.00 per year.

 

 4        Sec. 522. (1) The amount of a claim made pursuant to this

 

 5  chapter shall be determined as follows:

 

 6        (a) A claimant who is not a senior citizen is entitled to a

 

 7  credit against the state income tax liability under this part

 

 8  equal to 60% of the amount by which the property taxes on the

 

 9  homestead, or the credit for rental of the homestead for the tax

 

10  year, exceeds 3.5% of the claimant's total household resources

 

11  for that tax year.

 

12        (b) A claimant who is a senior citizen is entitled to a

 

13  credit against the state income tax liability under this part

 

14  equal to the following:

 

15        (i) For a claimant with total household resources of

 

16  $21,000.00 or less, an amount as determined in accordance with

 

17  subdivision (c).

 

18        (ii) For a claimant with total household resources of more

 

19  than $21,000.00 and less than or equal to $22,000.00, an amount

 

20  equal to 96% of the difference between the property taxes on the

 

21  homestead or the credit for rental of the homestead for the tax

 

22  year and 3.5% of total household resources.

 

23        (iii) For a claimant with total household resources of more

 

24  than $22,000.00 and less than or equal to $23,000.00, an amount

 

25  equal to 92% of the difference between the property taxes on the

 

26  homestead or the credit for rental of the homestead for the tax

 

27  year and 3.5% of total household resources.

 

 1        (iv) For a claimant with total household resources of more

 

 2  than $23,000.00 and less than or equal to $24,000.00, an amount

 

 3  equal to 88% of the difference between the property taxes on the

 

 4  homestead or the credit for rental of the homestead for the tax

 

 5  year and 3.5% of total household resources.

 

 6        (v) For a claimant with total household resources of more

 

 7  than $24,000.00 and less than or equal to $25,000.00, an amount

 

 8  equal to 84% of the difference between the property taxes on the

 

 9  homestead or the credit for rental of the homestead for the tax

 

10  year and 3.5% of total household resources.

 

11        (vi) For a claimant with total household resources of more

 

12  than $25,000.00 and less than or equal to $26,000.00, an amount

 

13  equal to 80% of the difference between the property taxes on the

 

14  homestead or the credit for rental of the homestead for the tax

 

15  year and 3.5% of total household resources.

 

16        (vii) For a claimant with total household resources of more

 

17  than $26,000.00 and less than or equal to $27,000.00, an amount

 

18  equal to 76% of the difference between the property taxes on the

 

19  homestead or the credit for rental of the homestead for the tax

 

20  year and 3.5% of total household resources.

 

21        (viii) For a claimant with total household resources of more

 

22  than $27,000.00 and less than or equal to $28,000.00, an amount

 

23  equal to 72% of the difference between the property taxes on the

 

24  homestead or the credit for rental of the homestead for the tax

 

25  year and 3.5% of total household resources.

 

26        (ix) For a claimant with total household resources of more

 

27  than $28,000.00 and less than or equal to $29,000.00, an amount

 

 1  equal to 68% of the difference between the property taxes on the

 

 2  homestead or the credit for rental of the homestead for the tax

 

 3  year and 3.5% of total household resources.

 

 4        (x) For a claimant with total household resources of more

 

 5  than $29,000.00 and less than or equal to $30,000.00, an amount

 

 6  equal to 64% of the difference between the property taxes on the

 

 7  homestead or the credit for rental of the homestead for the tax

 

 8  year and 3.5% of total household resources.

 

 9        (xi) For a claimant with total household resources of more

 

10  than $30,000.00, an amount equal to 60% of the difference between

 

11  the property taxes on the homestead or the credit for rental of

 

12  the homestead for the tax year and 3.5% of total household

 

13  resources.

 

14        (b) (c) A claimant who is a senior citizen with total

 

15  household resources of $21,000.00 or less or a paraplegic,

 

16  hemiplegic, or quadriplegic and for tax years that begin after

 

17  December 31, 1999, a claimant who is totally and permanently

 

18  disabled, deaf, or, for tax years that begin after December 31,

 

19  2012, blind is entitled to a credit against the state income tax

 

20  liability for the amount by which the property taxes on the

 

21  homestead, the credit for rental of the homestead, or a service

 

22  charge in lieu of ad valorem taxes as provided by section 15a of

 

23  the state housing development authority act of 1966, 1966 PA 346,

 

24  MCL 125.1415a, for the tax year exceeds the percentage of the

 

25  claimant's total household resources for that tax year computed

 

26  as follows:

 

 

1       Total household resources                      Percentage

2       Not over $3,000.00                                 .0%

3       Over $3,000.00 but not over $4,000.00             1.0%

4       Over $4,000.00 but not over $5,000.00             2.0%

5       Over $5,000.00 but not over $6,000.00             3.0%

6       Over $6,000.00                                    3.5%

 

 

 7        (c) (d) A claimant who is an eligible serviceperson,

 

 8  eligible veteran, or eligible widow or widower is entitled to a

 

 9  credit against the state income tax liability for a percentage of

 

10  the property taxes on the homestead for the tax year not in

 

11  excess of 100% determined as follows:

 

12        (i) Divide the taxable value allowance specified in section

 

13  506 by the taxable value of the homestead or, if the eligible

 

14  serviceperson, eligible veteran, or eligible widow or widower

 

15  leases or rents a homestead, divide 17% of the total annual rent

 

16  paid for tax years before the 1994 tax year, or 20% of the total

 

17  annual rent paid for tax years after the 1993 tax year on the

 

18  property by the property tax rate on the property.

 

19        (ii) Multiply the property taxes on the homestead by the

 

20  percentage computed in subparagraph (i).

 

21        (d) (e) A claimant who is blind is entitled to a credit

 

22  against the state income tax liability for a percentage of the

 

23  property taxes on the homestead for the tax year determined as

 

24  follows:

 

25        (i) If the taxable value of the homestead is $3,500.00 or

 

26  less, 100% of the property taxes.

 

27        (ii) If the taxable value of the homestead is more than

 

 1  $3,500.00, the percentage that $3,500.00 bears to the taxable

 

 2  value of the homestead.

 

 3        (2) A person who is qualified to make a claim under more

 

 4  than 1 classification shall elect the classification under which

 

 5  the claim is made.

 

 6        (3) Only 1 claimant per household for a tax year is entitled

 

 7  to the credit, unless both the husband and wife filing a joint

 

 8  return are blind, then each shall be considered a claimant.

 

 9        (4) As used in this section, "totally and permanently

 

10  disabled" means disability as defined in section 216 of title II

 

11  of the social security act, 42 USC 416.

 

12        (5) A senior citizen who has total household resources for

 

13  the tax year of $6,000.00 or less and who for 1973 received a

 

14  senior citizen homestead exemption under former section 7c of the

 

15  general property tax act, 1893 PA 206, may compute the credit

 

16  against the state income tax liability for a percentage of the

 

17  property taxes on the homestead for the tax year determined as

 

18  follows:

 

19        (a) If the taxable value of the homestead is $2,500.00 or

 

20  less, 100% of the property taxes.

 

21        (b) If the taxable value of the homestead is more than

 

22  $2,500.00, the percentage that $2,500.00 bears to the taxable

 

23  value of the homestead.

 

24        (6) For a return of less than 12 months, the claim shall be

 

25  reduced proportionately.

 

26        (7) The department may prescribe tables that may be used to

 

27  determine the amount of the claim.

 

 1        (8) The total credit allowed in this section for each year

 

 2  after December 31, 1975 shall not exceed $1,200.00 per year.

 

 3        (9) The total credit allowable under this part and part 361

 

 4  of the natural resources and environmental protection act, 1994

 

 5  PA 451, MCL 324.36101 to 324.36117, shall not exceed the total

 

 6  property tax due and payable by the claimant in that year. The

 

 7  amount by which the credit exceeds the property tax due and

 

 8  payable shall be deducted from the credit claimed under part 361

 

 9  of the natural resources and environmental protection act, 1994

 

10  PA 451, MCL 324.36101 to 324.36117.