Bill Text: MI SB0167 | 2015-2016 | 98th Legislature | Introduced

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Bill Title: Michigan business tax; deductions; purchases from other firms; clarify. Amends sec. 113 of 2007 PA 36 (MCL 208.1113).

Spectrum: Partisan Bill (Republican 9-0)

Status: (Introduced - Dead) 2015-02-26 - Referred To Committee On Finance [SB0167 Detail]

Download: Michigan-2015-SB0167-Introduced.html

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SENATE BILL No. 167

 

 

February 26, 2015, Introduced by Senators BRANDENBURG, ROBERTSON, ZORN, HORN, GREEN, EMMONS, MARLEAU, CASPERSON and KNOLLENBERG 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 2012 PA 601.

 

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 incurred to acquire 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.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 Department of Labor that does not

 

claim a credit under section 417 for the same tax year, 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) For the 2011 tax year and each tax year after 2011, a

 

person classified under the 2002 North American industrial

 

classification system number 484 as compiled by the United States

 

office of management and budget Office of Management and Budget

 

that does not qualify for a credit under section 417, payments to

 

subcontractors to transport freight by motor vehicle under a

 

contract specific to that freight to be transported by motor

 

vehicle.

 

     (7) "Revenue mile" means the transportation for a

 

consideration of 1 net ton in weight or 1 passenger the distance of

 

1 mile.

 

     Enacting section 1. This amendatory act is curative and

 

intended to clarify the original intent of 2007 PA 36. This

 

amendatory act is retroactive and effective for taxes levied on and

 

after January 1, 2008.