Bill Text: MI SB0073 | 2009-2010 | 95th Legislature | Introduced

---

Bill Title: Income tax; property tax credit; homestead property tax credit income eligibility; increase. Amends sec. 520 of 1967 PA 281 (MCL 206.520).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2009-01-27 - Referred To Committee On Finance [SB0073 Detail]

Download: Michigan-2009-SB0073-Introduced.html

---

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 73

 

 

January 27, 2009, Introduced by Senator PAPPAGEORGE and referred to the Committee on Finance.

 

 

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

by amending section 520 (MCL 206.520), as amended by 1995 PA 245.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

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

 

this act for the tax year a credit for the property taxes on the

 

taxpayer's homestead deductible for federal income tax purposes

 

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

 

have been deductible if the claimant had not elected the zero

 

bracket amount or if the claimant had been subject to the federal

 

income tax. The property taxes used for the credit computation

 

shall not be greater than the amount levied for 1 tax year.

 

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

 

similar credit computed under this section and section 522 based

 

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

 

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

 

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

 

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

 

15a of the state housing development authority act of 1966, Act No.

 

346 of the Public Acts of 1966, being section 125.1415a of the

 

Michigan Compiled Laws 1966 PA 346, MCL 125.1415a, may claim a

 

similar credit computed under this section and section 522 based

 

upon 10% of the gross rent paid.

 

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

 

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

 

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

 

offset against the tax liability shall, after examination and

 

review, be approved for payment, without interest, to the claimant.

 

In determining the amount of the payment under this subsection,

 

withholdings and other credits shall be used first to offset any

 

tax liabilities.

 

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

 

multidwelling building that is federally aided housing or state

 

aided housing, a claimant who is a senior citizen entitled to a

 

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

 

to a mortgagor if the mortgagor reduces the rent charged and

 

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

 

credit payment provided in this chapter. The assignment of the

 

claim is valid only if the Michigan state housing development

 

authority, by affidavit, verifies that the claimant's rent has been

 

so reduced.

 

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

 

that is rented or leased as a homestead.

 

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

 

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

 

because the renter or lessee claims and receives a credit or

 

payment under this chapter is guilty of a misdemeanor.

 

Discrimination against a renter who claims and receives the credit

 

under this section and section 522 by a reduction of the rent on

 

the homestead of a person who does not claim and receive the credit

 

is a misdemeanor. If discriminatory rents are charged or collected,

 

each charge or collection of the higher or lower payment is a

 

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

 

separate offense.

 

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

 

children, state family assistance, or state disability assistance

 

through department of human services programs pursuant to the

 

social welfare act, Act No. 280 of the Public Acts of 1939, as

 

amended, being sections 400.1 to 400.119b of the Michigan Compiled

 

Laws 1939 PA 280, MCL 400.1 to 400.119b, in the tax year for which

 

the person is filing a return shall have a credit that is

 

authorized and computed under this section and section 522 reduced

 

by an amount equal to the product of the claimant's credit

 

multiplied by the quotient of the sum of the claimant's aid to

 

families with dependent children, state family assistance, and

 

state disability assistance through department of human services

 

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

 

to 400.119b, for the tax year divided by the claimant's household

 

income. The reduction of credit shall not exceed the sum of the aid

 

to families with dependent children, state family assistance, and

 

state disability assistance through department of human services

 

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

 

to 400.119b, for the tax year. For the purposes of this subsection,

 

aid to families with dependent children any assistance through

 

department of human services programs does not include child

 

support payments that offset or reduce payments made to the

 

claimant.

 

     (8) A For tax years that begin before January 1, 2010, a

 

credit under subsection (1) or (2) shall be reduced by 10% for each

 

claimant whose household income exceeds $73,650.00 and by an

 

additional 10% for each increment of $1,000.00 of household income

 

in excess of $73,650.00. For tax years that begin on or after

 

January 1, 2010, a credit under subsection (1) or (2) shall be

 

reduced by 10% for each claimant whose household income exceeds

 

$83,650.00 and by an additional 10% for each increment of $1,000.00

 

of household income in excess of $83,650.00.

 

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

 

and section 522 and adjusted under subsection (7) or (8) does not

 

provide to a senior citizen who rents or leases a homestead that

 

amount attributable to rent that constitutes more than 40% of the

 

household income of the senior citizen, the senior citizen may

 

claim a credit based upon the amount of household income

 

attributable to rent as provided by this section.

 

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

 

is more than the percentage of household income specified in

 

subsection (9) for the respective tax year may claim a credit for

 

the amount of rent paid that constitutes more than the percentage

 

of the household income of the senior citizen specified in

 

subsection (9) and that was not provided to the senior citizen by

 

the credit computed pursuant to this section and section 522 and

 

adjusted pursuant to subsection (7) or (8).

 

     (11) The department may promulgate rules to implement

 

subsections (9) to (16) (14) and may prescribe a table to allow a

 

claimant to determine the credit provided under this section and

 

section 522 in the instruction booklet that accompanies the

 

respective income tax or property tax credit forms used by

 

claimants.

 

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

 

(9) to (16) (14) on the same form as the property tax credit

 

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

 

accordingly.

 

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

 

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

 

both his or her qualification to claim a credit under subsections

 

(9) to (16) (14) and the amount of a credit under subsections (9)

 

to (16) (14) on the basis of the annualized final monthly rental

 

payment at his or her previous homestead, if this annualized rental

 

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

 

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

 

credit under subsections (9) to (16) (13) shall be reduced

 

proportionately.

 

     (15) The Michigan state housing development authority shall

 

report on the effect of the credit provided by subsections (9) to

 

(16) (14) on the price of rented and leased homesteads. If the

 

authority determines that the price of rented and leased homesteads

 

has increased as a result of the credit provided by subsections (9)

 

to (16) (14), the authority shall make recommendations to the

 

legislature to remedy this situation. The report shall be made to

 

the chairpersons of the house and senate committees that have

 

primary responsibility for taxation legislation 2 years after the

 

credit provided by subsections (9) to (16) (14) is in effect.

 

     (16) The total credit allowed by this section and section 522

 

shall not exceed $1,200.00 per year for tax years that begin before

 

January 1, 2010 and $1,300.00 for tax years that begin after

 

December 31, 2009.