Bill Text: MI HB5254 | 2019-2020 | 100th Legislature | Introduced
Bill Title: Michigan business tax; credits; amount of MEGA credits that may be created each fiscal year; limit. Amends sec. 500 of 2007 PA 36 (MCL 208.1500) & repeals 2007 PA 36 (MCL 208.1101 - 208.1601).
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2019-11-20 - Bill Electronically Reproduced 11/20/2019 [HB5254 Detail]
Download: Michigan-2019-HB5254-Introduced.html
HOUSE BILL NO. 5254
November 13, 2019, Introduced by Reps. Rabhi,
Hope, Pohutsky, Hood, Wittenberg, Miller, Steven Johnson, Howell, Hoitenga,
Haadsma, Sowerby, Brann and Reilly and referred to the Committee on Tax
Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 500 (MCL 208.1500), as amended by 2016 PA 426; and to repeal acts and parts of acts.
the people of the state of michigan enact:
Sec. 500. (1) Except as otherwise provided in this
section, a taxpayer described under section 117(5)(a) or under section 680 of
the income tax act of 1967, 1967 PA 281, MCL 206.680, that voluntarily elects
for the taxpayer's first tax year ending after December 31, 2011 to file a
return and pay the tax imposed by this act in order to claim a certificated
credit or any unused carryforward for that tax year shall continue to file a
return and pay the tax imposed under this act for each tax year thereafter
until that certificated credit and any carryforward from that credit is used
up. For the 2019-2020 fiscal year, the
total amount of all certificated credits under sections 430, 431, 431a, 431b,
432, 434, and 450 that may be claimed shall not exceed $200,000,000.00. For the
2020-2021 fiscal year, the total amount of all certificated credits under
sections 430, 431, 431a, 431b, 432, 434, and 450 that may be claimed shall not
exceed $100,000,000.00. Except as otherwise provided under
subsection (7), if a person awarded a certificated credit is a member of a
unitary business group, the unitary business group, and not the member, shall
file a return and pay the tax, if any, under this act and claim the
certificated credit. Except as otherwise provided under subsection (7), if the
taxpayer that elects to file a return and pay the tax imposed by this act in
order to claim a certificated credit or any unused carryforward of that credit
for that tax year is a unitary business group, the return filed by the unitary
business group shall include all persons included in the unitary business group
regardless of whether that person is incorporated. Notwithstanding any other
provision of this act or part 2 or 3 of the income tax act of 1967, 1967 PA
281, MCL 206.601 to 206.713, in the case of a flow-through entity that has made
an election under this section, each member of the flow-through entity that
does not file as a member of a unitary business group with the flow-through
entity shall disregard all items attributable to that member's ownership
interest in the electing flow-through entity for all purposes of part 2 of the
income tax act of 1967, 1967 PA 281, MCL 206.601 to 206.699, and the electing
flow-through entity shall not be subject to the tax withholding provisions of
section 703(4) of the income tax act of 1967, 1967 PA 281, MCL 206.703, with
respect to its members that are corporations.
(2) A taxpayer with a
certificated credit under section 435 or 437, which certificated credit or any
unused carryforward may be claimed in a tax year ending after December 31, 2011
may elect to pay the tax imposed by this act in the tax year in which that
certificated credit may be claimed in lieu of the tax imposed under part 2 of
the income tax act of 1967, 1967 PA 281, MCL 206.601 to 206.699. If a person
with a certificated credit under section 435 or 437 that elects under this
subsection to pay the tax imposed by this act is a member of a unitary business
group, the unitary business group, and not the member, shall file a return and
pay the tax, if any, under this act and claim that certificated credit.
(3) A taxpayer with a
certificated credit under section 435 or 437 that elects under subsection (2)
after the taxpayer's first tax year ending after December 31, 2011 to pay the
tax imposed by this act may claim any other certificated credit that taxpayer
would be eligible for in the year in which the taxpayer claims a certificated
credit under section 435 or 437, but not any certificated credit that would have
accrued in any year before the election under subsection (2). A taxpayer with a
certificated credit under section 437(10) that elects under subsection (2)
after the taxpayer's first tax year after December 31, 2011 to pay the tax
imposed by this act shall continue to file a return and pay the tax imposed
under this act for each tax year thereafter until the certificated credit under
section 437(10) is complete and that credit is used up. When the taxpayer's
certificated credit under section 435 or 437 that was the basis for the
taxpayer's election under subsection (2) is extinguished, the taxpayer is no
longer eligible to pay the tax under this act and may no longer claim any other
remaining certificated credits.
(4) For tax years that
begin after December 31, 2011, a taxpayer's tax liability under this act, after
application of all credits, deductions, and exemptions, shall be the greater of
the following:
(a) The amount of the
taxpayer's tax liability under this act, notwithstanding the calculation
required under this section, after application of all credits, deductions, and
exemptions and any carryforward of any unused credit as prescribed in this act.
(b) An amount equal to
the taxpayer's tax liability as computed pursuant to part 2 of the income tax
act of 1967, 1967 PA 281, MCL 206.601 to 206.699, after application of all
credits, deductions, and exemptions under part 2 of the income tax act of 1967,
1967 PA 281, MCL 206.601 to 206.699, as if the taxpayer were subject to the tax
imposed under part 2 of the income tax act of 1967, 1967 PA 281, MCL 206.601 to
206.699, less the amount of the taxpayer's certificated credits, including any
unused carryforward of a certificated credit, that the taxpayer was allowed to
claim for the tax year under this act. However, in calculating the amount under
this subdivision, the following apply:
(i) A taxpayer described under section 117(5)(a) shall not
include a deduction for any business loss under section 623(4) of the income
tax act of 1967, 1967 PA 281, MCL 206.623, for any prior year in which the
taxpayer was not subject to the tax levied under this act.
(ii) A taxpayer shall
not include any nonrefundable certificated credit to the extent that credit
exceeds the taxpayer's tax liability. Any nonrefundable credit remaining after
application of the limitation in this subparagraph may be carried forward.
(iii) For a taxpayer
that is a partnership or S corporation, business income includes payments and
items of income and expense that are attributable to business activity of the
partnership or subchapter S
corporation and separately reported to the members.
(5) If the result of the calculation under subsection (4) is
negative, the taxpayer shall be refunded that amount.
(6) A taxpayer with a certificated credit under subsection
(7) or section 435 or 437 that elects to pay the tax under this act may elect
to claim a refundable credit as provided under section 510. If a refundable
credit is claimed under section 510, that credit shall not be used to calculate
a taxpayer's tax liability under subsection (4).
(7) Subject to the limitations provided under this
subsection, a taxpayer that is a member of a unitary business group and that
has a certificated credit under sections 431 and 434(2) and (5) is not required
to file a combined return as a unitary business group and may elect to file a
separate return and pay the tax, if any, under this act and claim the
certificated credit under section 434(5) as provided under this subsection. A
taxpayer that elects to file a separate return as provided under this
subsection and redeem a voucher certificate under a voucher agreement entered
pursuant to this subsection and proceeding from an agreement entered pursuant
to section 434(5) for an amount equal to the employment expenses and related
engineering product development and administrative costs for the support of
integrated battery cells, anodes and cathodes, and cell assembly shall create
an additional 100 new jobs in this state, for a total of 400 new jobs, and the
maximum allowable amount redeemed under this subsection or under section 510
shall not exceed $25,000,000.00 per year for no more than 3 years. A taxpayer
that elects to file as provided under this subsection and redeem a voucher
certificate under a voucher agreement entered pursuant to this subsection and
proceeding from an agreement entered pursuant to section 434(5) shall not claim
a credit for any agreement entered pursuant to section 431 or 434(2).
(8) A taxpayer with a certificated credit granted under
section 36109 of the natural resources and environmental protection act, 1994
PA 451, MCL 324.36109, which certificated credit had been claimed in a previous
tax year under part 1 of the income tax act of 1967, 1967 PA 281, MCL 206.1 to
206.532, but that certificated credit is no longer eligible to be claimed under
part 1 of the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532, as a
result of the death occurring after December 31, 2011 of an individual farmland
owner, or an individual considered the farmland owner under section 36109(1)(d)
of the natural resources and environmental protection act, 1994 PA 451, MCL
324.36109, and the transfer of the ownership of the farmland property subject
to the farmland development rights agreement upon which that certificated credit
is based into an estate or trust, may elect to pay the tax imposed by this act
in the first tax year in which that certificated credit may be claimed under
this act. A taxpayer that elects under this subsection to pay the tax imposed
by this act shall continue to file a return and pay the tax imposed under this
act for each tax year thereafter until the certificated credit granted under
section 36109 of the natural resources and environmental protection act, 1994
PA 451, MCL 324.36109, is complete and that credit is used up, or the taxpayer
no longer owns the property subject to the agreement, whichever occurs first.
When the taxpayer's certificated credit under section 36109 of the natural
resources and environmental protection act, 1994 PA 451, MCL 324.36109, that
was the basis for the taxpayer's election under this subsection is
extinguished, or the taxpayer no longer owns that property under the agreement,
whichever occurs first, the taxpayer is no longer eligible to pay the tax under
this act and may no longer claim any other remaining certificated credits.
Enacting section 1. The Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, is repealed effective October 1, 2021 and does not apply to business activity in this state after September 30, 2021.
