Bill Text: MI SB0414 | 2015-2016 | 98th Legislature | Chaptered
Bill Title: Individual income tax; rate; rollback under certain circumstances; provide for. Amends sec. 51 of 1967 PA 281 (MCL 206.51). TIE BAR WITH: HB 4370'15, HB 4614'15, HB 4616'15, HB 4736'15, HB 4737'15, HB 4738'15
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2015-12-01 - Assigned Pa 0180'15 With Immediate Effect [SB0414 Detail]
Download: Michigan-2015-SB0414-Chaptered.html
Act No. 180
Public Acts of 2015
Approved by the Governor
November 10, 2015
Filed with the Secretary of State
November 10, 2015
EFFECTIVE DATE: November 10, 2015
STATE OF MICHIGAN
98TH LEGISLATURE
REGULAR SESSION OF 2015
Introduced by Senator Schmidt
ENROLLED SENATE BILL No. 414
AN ACT to amend 1967 PA 281, entitled “An act to meet deficiencies in state funds by providing for the imposition, levy, computation, collection, assessment, reporting, payment, and enforcement by lien and otherwise of taxes on or measured by net income and on certain commercial, business, and financial activities; to prescribe the manner and time of making reports and paying the taxes, and the functions of public officers and others as to the taxes; to permit the inspection of the records of taxpayers; to provide for interest and penalties on unpaid taxes; to provide exemptions, credits and refunds of the taxes; to prescribe penalties for the violation of this act; to provide an appropriation; and to repeal acts and parts of acts,” by amending section 51 (MCL 206.51), as amended by 2012 PA 223.
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 under this part upon the taxable income of every person other than a corporation a tax at the following rates in the following circumstances:
(a) On and after October 1, 2007 and before October 1, 2012, 4.35%.
(b) Except as otherwise provided under subdivision (c), on and after October 1, 2012, 4.25%.
(c) For each tax year beginning on and after January 1, 2023, if the percentage increase in the total general fund/general purpose revenue from the immediately preceding fiscal year is greater than the inflation rate for the same period and the inflation rate is positive, then the current rate shall be reduced by an amount determined by multiplying that rate by a fraction, the numerator of which is the difference between the total general fund/general purpose revenue from the immediately preceding state fiscal year and the capped general fund/general purpose revenue and the denominator of which is the total revenue collected from this part in the immediately preceding state fiscal year. For purposes of this subdivision only, the state treasurer, the director of the senate fiscal agency, and the director of the house fiscal agency shall determine whether the total revenue distributed to general fund/general purpose revenue has increased as required under this subdivision based on the comprehensive annual financial report prepared and published by the department of technology, management, and budget in accordance with section 23 of article IX of the state constitution of 1963. The state treasurer, the director of the senate fiscal agency, and the director of the house fiscal agency shall make the determination under this subdivision no later than the date of the January 2023 revenue estimating conference conducted pursuant to sections 367a through 367f of the management and budget act, 1984 PA 431, MCL 18.1367a to 18.1367f, and the date of each January revenue estimating conference conducted each year thereafter. As used in this subdivision:
(i) “Capped general fund/general purpose revenue” means the total general fund/general purpose revenue from the 2020-2021 state fiscal year multiplied by the sum of 1 plus the product of 1.425 times the difference between a fraction, the numerator of which is the consumer price index for the state fiscal year ending in the tax year prior to the tax year for which the adjustment is being made and the denominator of which is the consumer price index for the 2020-2021 state fiscal year, and 1.
(ii) “Total general fund/general purpose revenue” means the total general fund/general purpose revenue and other financing sources as published in the comprehensive annual financial report schedule of revenue and other financing sources - general fund for that fiscal year plus any distribution made pursuant to section 51d.
(2) 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 shall be deposited in the state school aid fund created in section 11 of article IX of the state constitution of 1963.
(3) The department shall annualize rates provided in subsection (1) as necessary. 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 part.
(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 part. The credit shall be all or a proportionate part of any tax paid by the trust under this part 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 part 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 part.
(8) As used in this section:
(a) “Consumer price index” means the United States consumer price index for all urban consumers as defined and reported by the United States Department of Labor, Bureau of Labor Statistics.
(b) “Inflation rate” means the annual percentage change in the consumer price index, as determined by the department, comparing the 2 most recent completed state fiscal years.
(c) “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.
(d) “Taxable income” means taxable income as defined in this part subject to the applicable source and attribution rules contained in this part.
Enacting section 1. This amendatory act does not take effect unless all of the following bills of the 98th Legislature are enacted into law:
(a) House Bill No. 4370.
(b) House Bill No. 4614.
(c) House Bill No. 4616.
(d) House Bill No. 4736.
(e) House Bill No. 4737.
(f) House Bill No. 4738.
This act is ordered to take immediate effect.
Secretary of the Senate
Clerk of the House of Representatives
Approved
Governor
