Bill Text: MI SB0290 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Income tax; index; sunset on income tax rate; modify. Amends sec. 51 of 1967 PA 281 (MCL 206.51).

Spectrum: Partisan Bill (Democrat 7-0)

Status: (Introduced - Dead) 2011-03-22 - Referred To Committee On Finance [SB0290 Detail]

Download: Michigan-2011-SB0290-Introduced.html

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SENATE BILL No. 290

 

 

March 22, 2011, Introduced by Senators WARREN, YOUNG, HOPGOOD, JOHNSON, HUNTER, SMITH and GLEASON and referred to the Committee on Finance.

 

 

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

by amending section 51 (MCL 206.51), as amended by 2007 PA 94.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 51. (1) For receiving, earning, or otherwise acquiring

 

income from any source whatsoever, there is levied and imposed upon

 

the taxable income of every person other than a corporation a tax

 

at the following rates in the following circumstances:

 

     (a) Before May 1, 1994, 4.6%.

 

     (b) After April 30, 1994 and before January 1, 2000, 4.4%.

 

     (c) For tax years that begin on and after January 1, 2000 and

 

before January 1, 2002, 4.2%.

 

     (d) For tax years that begin on and after January 1, 2002 and

 

before January 1, 2003, 4.1%.

 

     (e) On and after January 1, 2003 and before July 1, 2004,

 

4.0%.

 

     (f) On and after July 1, 2004 and before October 1, 2007,

 

3.9%.

 

     (g) On Except as otherwise provided under subdivision (h), on

 

and after October 1, 2007, and before October 1, 2011, 4.35%.

 

     (h) Beginning on October 1, 2011 and each October 1 after

 

2011, if the balance of the countercyclical budget and economic

 

stabilization fund created in section 351 of the management and

 

budget act, 1984 PA 431, MCL 18.1351, at the end of the immediately

 

preceding fiscal year is $200,000,000.00 or more, then the maximum

 

rate under this subsection shall be reduced by 0.1 each year until

 

the rate is 3.95%.

 

     (i) On and after October 1 , 2015 of the fiscal year

 

immediately succeeding the fiscal year that the rate was 3.95%,

 

3.9%.

 

     (2) The following percentages of the net revenues collected

 

under this section shall be deposited in the state school aid fund

 

created in section 11 of article IX of the state constitution of

 

1963:

 

     (a) Beginning October 1, 1994 and before October 1, 1996,

 

14.4% of the gross collections before refunds from the tax levied

 

under this section.

 

     (b) After September 30, 1996 and before January 1, 2000, 23.0%

 

of the gross collections before refunds from the tax levied under

 

this section.

 

     (c) Beginning January 1, 2000, that percentage of the gross

 

collections before refunds from the tax levied under this section

 

that is equal to 1.012% divided by the income tax rate levied under

 

this section.

 

     (3) The department shall annualize rates provided in

 

subsection (1) as necessary for tax years that end after April 30,

 

1994. The applicable annualized rate shall be imposed upon the

 

taxable income of every person other than a corporation for those

 

tax years.

 

     (4) The taxable income of a nonresident shall be computed in

 

the same manner that the taxable income of a resident is computed,

 

subject to the allocation and apportionment provisions of this act.

 

     (5) A resident beneficiary of a trust whose taxable income

 

includes all or part of an accumulation distribution by a trust, as

 

defined in section 665 of the internal revenue code, shall be

 

allowed a credit against the tax otherwise due under this act. The

 

credit shall be all or a proportionate part of any tax paid by the

 

trust under this act for any preceding taxable year that would not

 

have been payable if the trust had in fact made distribution to its

 

beneficiaries at the times and in the amounts specified in section

 

666 of the internal revenue code. The credit shall not reduce the

 

tax otherwise due from the beneficiary to an amount less than would

 

have been due if the accumulation distribution were excluded from

 

taxable income.

 

     (6) The taxable income of a resident who is required to

 

include income from a trust in his or her federal income tax return

 

under the provisions of 26 USC 671 to 679, shall include items of

 

income and deductions from the trust in taxable income to the

 

extent required by this act with respect to property owned

 

outright.

 

     (7) It is the intention of this section that the income

 

subject to tax of every person other than corporations shall be

 

computed in like manner and be the same as provided in the internal

 

revenue code subject to adjustments specifically provided for in

 

this act.

 

     (8) There is appropriated to the department of treasury for

 

the 2006-2007 state fiscal year the sum of $100,000.00 to begin

 

implementing the requirements of the amendatory act that added this

 

subsection 2007 PA 94. Any portion of this amount under this

 

section that is not expended in the 2006-2007 state fiscal year

 

shall not lapse to the general fund but shall be carried forward in

 

a work project account that is in compliance with section 451a of

 

the management and budget act, 1984 PA 431, MCL 18.1451a, for the

 

following state fiscal year.

 

     (9) As used in this section:

 

     (a) "Person other than a corporation" means a resident or

 

nonresident individual or any of the following:

 

     (i) A partner in a partnership as defined in the internal

 

revenue code.

 

     (ii) A beneficiary of an estate or a trust as defined in the

 

internal revenue code.

 

     (iii) An estate or trust as defined in the internal revenue

 

code.

 

     (b) "Taxable income" means taxable income as defined in this

 

act subject to the applicable source and attribution rules

 

contained in this act.