January 28, 2009, Introduced by Senator GILBERT and referred to the Committee on Finance.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 113 (MCL 208.1113), as amended by 2008 PA 472.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 113. (1) "Partner" means a partner or member of a
partnership.
(2) "Partnership" means a taxpayer that is required to or has
elected to file as a partnership for federal income tax purposes.
(3) "Person" means an individual, firm, bank, financial
institution, insurance company, limited partnership, limited
liability partnership, copartnership, partnership, joint venture,
association, corporation, subchapter S corporation, limited
liability company, receiver, estate, trust, or any other group or
combination of groups acting as a unit.
(4) "Professional employer organization" means an organization
that provides the management and administration of the human
resources of another entity by contractually assuming substantial
employer rights and responsibilities through a professional
employer agreement that establishes an employer relationship with
the leased officers or employees assigned to the other entity by
doing all of the following:
(a) Maintaining a right of direction and control of employees'
work, although this responsibility may be shared with the other
entity.
(b) Paying wages and employment taxes of the employees out of
its own accounts.
(c) Reporting, collecting, and depositing state and federal
employment taxes for the employees.
(d) Retaining a right to hire and fire employees.
(5) Professional employer organization is not a staffing
company as that term is defined in subsection (6).
(6) "Purchases from other firms" means all of the following:
(a) Inventory acquired during the tax year, including freight,
shipping, delivery, or engineering charges included in the original
contract price for that inventory.
(b) Assets, including the costs of fabrication and
installation, acquired during the tax year of a type that are, or
under the internal revenue code will become, eligible for
depreciation, amortization, or accelerated capital cost recovery
for federal income tax purposes.
(c) To the extent not included in inventory or depreciable
property, materials and supplies, including repair parts and fuel.
(d) For a staffing company, compensation of personnel supplied
to customers of staffing companies. As used in this subdivision:
(i) "Compensation" means that term as defined under section 107
plus all payroll tax and worker's compensation costs.
(ii) "Staffing company" means a taxpayer whose business
activities are included in industry group 736 under the standard
industrial classification code as compiled by the United States
department of labor.
(e) For a person included in major group 15, 16, or 17 under
the standard industrial classification code as compiled by the
United States department of labor that does not qualify for a
credit under section 417, both of the following:
(i) Payments to subcontractors for a construction project under
a contract specific to that project.
(ii) To the extent not deducted under subdivisions (a) and (c),
payments for materials deducted as purchases in determining the
cost of goods sold for the purpose of calculating total income on
the taxpayer's federal income tax return.
(f) For the 2008 tax year and each tax year after 2008, all
film rental or royalty payments paid by a theater owner to a film
distributor, a film producer, or a film distributor and producer.
(g) For a taxpayer licensed under article 25 or 26 of the
occupational code, 1980 PA 299, MCL 339.2501 to 339.2518 and
339.2601 to 339.2637, payments to an independent contractor
licensed under article 25 or 26 of the occupational code, 1980 PA
299, MCL 339.2501 to 339.2518 and 339.2601 to 339.2637.
(h) Services purchased during the tax year that are directly
related to business activity, excluding services performed by an
employee for an employer and services performed by a subcontractor
that are included in a construction project for which those
payments have been excluded from gross receipts under subdivision
(e).
(7) "Revenue mile" means the transportation for a
consideration of 1 net ton in weight or 1 passenger the distance of
1 mile.