Bill Text: MI HB5796 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Michigan business tax; gross receipts; deduction for compensation; allow. Amends sec. 203 of 2007 PA 36 (MCL 208.1203).
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2010-02-10 - Printed Bill Filed 02/10/2010 [HB5796 Detail]
Download: Michigan-2009-HB5796-Introduced.html
HOUSE BILL No. 5796
February 9, 2010, Introduced by Reps. Meekhof, Kowall and Schuitmaker and referred to the Committee on Tax Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 203 (MCL 208.1203), as amended by 2008 PA 168.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 203. (1) Except as otherwise provided in this act, there
is levied and imposed a modified gross receipts tax on every
taxpayer with nexus as determined under section 200. The modified
gross receipts tax is imposed on the modified gross receipts tax
base, after allocation or apportionment to this state at a rate of
0.80%.
(2) The tax levied and imposed under this section is upon the
privilege of doing business and not upon income or property.
(3) The modified gross receipts tax base means a taxpayer's
gross receipts subject to the adjustment in subsection (6), if
applicable, less compensation and purchases from other firms before
apportionment under this act. The modified gross receipts of a
unitary business group is the sum of modified gross receipts of
each person, other than a foreign operating entity or a person
subject to the tax imposed under chapter 2A or 2B, included in the
unitary business group less any modified gross receipts arising
from transactions between persons included in the unitary business
group.
(4) For the 2008 tax year, deduct 65% of any remaining
business loss carryforward calculated under section 23b(h) of
former 1975 PA 228 that was actually incurred in the 2006 or 2007
tax year to the extent not deducted in tax years beginning before
January 1, 2008. A deduction under this subsection shall not
include any business loss carryforward that was incurred before
January 1, 2006. If the taxpayer is a unitary business group, the
business loss carryforward under this subsection may only be
deducted against the modified gross receipts tax base of that
person included in the unitary business group calculated as if the
person was not included in the unitary business group.
(5) Nothing in this act shall prohibit a taxpayer who
qualifies for the credit under section 445 or a taxpayer who is a
dealer of new or used personal watercraft from collecting the tax
imposed under this section in addition to the sales price. The
amount remitted to the department for the tax under this section
shall not be less than the stated and collected amount.
(6) Subject to the limitations provided in this subsection,
for a person that is a qualified affordable housing project, deduct
an amount equal to that person's total gross receipts attributable
to residential rental units in this state owned by the qualified
affordable housing project multiplied by a fraction, the numerator
of which is the number of rent restricted units in this state owned
by the qualified affordable housing project and the denominator of
which is the number of all rental units in this state owned by the
qualified affordable housing project. The amount of the deduction
calculated under this subsection shall be reduced by the amount of
limited dividends or other distributions made to the partners,
members, or shareholders of the qualified affordable housing
project. Gross receipts attributable to residential rental units do
not include amounts received by the management, construction, or
development company for completion and operation of the project and
those rental units.
(7) If a qualified affordable housing project no longer meets
the requirements of subsection (8)(b) or fails to operate those
residential rental units as rent restricted units in accordance
with the operation agreement and the requirements of subsection
(8)(c), the qualified affordable housing project is entitled to the
deduction under subsection (6) as long as the qualified affordable
housing project continues to offer some of the residential rental
units purchased as rent restricted units in accordance with the
operation agreement.
(8) For purposes of subsections (6) and (7) and this
subsection:
(a) "Limited dividend housing association" means a limited
dividend housing association, corporation, or cooperative organized
and qualified pursuant to chapter 7 of the state housing
development authority act of 1966, 1966 PA 346, MCL 125.1491 to
125.1496.
(b) "Qualified affordable housing project" means a person that
is organized, qualified, and operated as a limited dividend housing
association that has a limitation on the amount of dividends or
other distributions that may be distributed to its owners in any
given year and has received funding, subsidies, grants, operating
support, or construction or permanent funding through 1 or more of
the following sources and programs:
(i) Mortgage or other financing provided by the Michigan state
housing development authority created in section 21 of the state
housing development authority act of 1966, 1966 PA 346, MCL
125.1421, the United States department of housing and urban
development, the United States department of agriculture for rural
housing service, the Michigan interfaith housing trust fund,
Michigan housing and community development fund, federal home loan
bank, housing commission loan, community development financial
institution, or mortgage or other funding or guaranteed by Fannie,
Ginnie, federal housing association, United States department of
agriculture, or federal home loan mortgage corporation.
(ii) A tax-exempt bond issued by a nonprofit organization,
local governmental unit, or other authority.
(iii) A payment in lieu of tax agreement or other tax abatement.
(iv) Funding from the state or a local governmental unit
through a HOME investments partnership program authorized under 42
USC 12741 to 12756.
(v) A grant or other funding from a federal home loan bank's
affordable housing program.
(vi) Financing or funding under the new markets tax credit
program under section 45D of the internal revenue code.
(vii) Financed in whole or in part under the United States
department of housing and urban development's hope VI program as
authorized by section 803 of the national affordable housing act,
42 USC 8012.
(viii) Financed in whole or in part under the United States
department of housing and urban development's section 202 program
authorized by section 202 of the national housing act, 12 USC
1701q.
(ix) Financing or funding under the low-income housing tax
credit program under section 42 of the internal revenue code.
(x) Financing or other subsidies from any new programs similar
to any of the above.
(c) "Rent restricted unit" means any residential rental unit's
rental income is restricted in accordance with section 42(g)(1) of
the internal revenue code as if it was a qualified low-income
housing project, or receives rental assistance in the form of HUD
section 8 subsidies or HUD housing assistance program subsidies, or
rental assistance from the United States department of agriculture
rural housing programs, from any of the other programs described
under subdivision (b).
Enacting section 1. This amendatory act applies to taxes
levied after December 31, 2009.
