Bill Text: MI HB4691 | 2023-2024 | 102nd Legislature | Introduced
Bill Title: Individual income tax: credit; credit for certain investments in Michigan businesses; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 280.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Introduced) 2024-12-11 - Referred To Second Reading [HB4691 Detail]
Download: Michigan-2023-HB4691-Introduced.html
HOUSE BILL NO. 4691
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding section 280.
the people of the state of michigan enact:
Sec. 280. (1) For tax years beginning on and after January 1, 2023, subject to the limitations under this section, a taxpayer that makes a qualified investment in a qualified business may claim a credit against the tax imposed by this part equal to 50% of the qualified investment made during the tax year. A taxpayer shall not claim a credit of more than $3,000.00 based on a qualified investment in any 1 qualified business and shall not claim a credit of more than $3,000.00 for qualified investments in all qualified businesses in any 1 year. To qualify for the credit under this section, the taxpayer shall request certification from the Michigan strategic fund within 60 days of making the investment.
(2) The Michigan strategic fund shall develop an application and approval process in order to certify investments under this section and adopt a program describing parameters and criteria to be used for approving investments. As part of that program adoption, the Michigan strategic fund may determine and describe the conditions to be met to be considered a qualified investment. Any investment for which a credit is sought under this section is subject to the uniform securities act (2002), 2008 PA 551, MCL 451.2101 to 451.2703, and must be made in compliance with applicable state and federal securities laws, rules, and regulations.
(3) A taxpayer shall not claim a credit under this section unless the Michigan strategic fund has issued a certificate to the taxpayer. The taxpayer shall attach the certificate to the annual return filed under this part on which a credit under this section is claimed. The certificate required under this subsection shall specify all of the following:
(a) The total amount of investment made during the tax year by the taxpayer in each qualified business.
(b) The total amount of qualified investments made in each qualified business if different from the previous amount.
(c) The total amount of the credit under this section that the taxpayer is allowed to claim for the designated tax year.
(4) If the amount of the credit allowed under this section exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability of the taxpayer for the tax year shall not be refunded but may be carried forward to offset tax liability under this part in subsequent tax years for a period not to exceed 10 tax years or until used up, whichever occurs first.
(5) As used in this section:
(a) "Family member" means an individual who is the spouse, mother, father, brother, sister, child, stepparent, stepchild, stepbrother, stepsister, grandparent, grandchild, legal ward, or a legally appointed guardian with a certified letter of guardianship, of the investor.
(b) "Michigan strategic fund" means the Michigan strategic fund as described in the Michigan strategic fund act, 1984 PA 270, MCL 125.2001 to 125.2094.
(c) "Qualified business" means a business that the Michigan strategic fund certifies as in compliance with all of the following at the time of the investment:
(i) The business has its headquarters in this state, is domiciled in this state, and has a majority of its employees working in this state, and its transactions are limited to residents of this state under section 3(a)(11) of the securities act of 1933, 15 USC 77c.
(ii) The business receives at least 80% of its gross revenues from the operation of its business in this state.
(iii) The business has at least 80% of its assets in this state.
(d) "Qualified investment" means a cash or a cash equivalent investment certified by the Michigan strategic fund in a qualified business and that is not in a qualified business in which a family member of the investor is an employee or owner of the business or in which the investor or a family member of the investor has a preexisting fiduciary relationship with the business.
Enacting section 1. It is the intent of the legislature to annually appropriate sufficient funds from the state general fund to the state school aid fund created in section 11 of article IX of the state constitution of 1963 to fully compensate for any loss of revenue resulting from the enactment of this amendatory act.
