Bill Text: MI SB0414 | 2015-2016 | 98th Legislature | Engrossed
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-Engrossed.html
SB-0414, As Passed House, October 21, 2015
HOUSE SUBSTITUTE FOR
SENATE BILL NO. 414
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
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)
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%.
(a) (g)
On and after October 1, 2007 and before
October 1,
2012, 4.35%.
(b) (h)
Beginning 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, 2019,
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 2019 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 state fiscal
year ending in the tax year 2 years prior to the tax year for which
the adjustment is being made multiplied by 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 state fiscal year ending in the tax
year 2 years prior to the tax year for which the adjustment is
being made.
(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.
(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.
(2) (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 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. 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
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) (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.
(d) (b)
"Taxable income" means
taxable income as defined in
this part subject to the applicable source and attribution rules
contained in this part.
