HOUSE BILL No. 4617


     April 15, 1997, Introduced by Reps. Stallworth, Parks and Hale and referred to the Committee on Tax Policy.


        A bill to amend 1975 PA 228, entitled

   "Single business tax act,"

   by amending section 4 (MCL 208.4), as amended by 1995 PA 285.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 4.  (1) "Casual transaction" means a transaction made

 2    or engaged in other than in the ordinary course of repeated and

 3    successive transactions of a like character, except that a trans-

 4    action made or engaged in by a person that is incidental to that

 5    person's regular business activity is a business activity within

 6    the meaning of this act.

 7         (2) "Commissioner" means the state commissioner of revenue.

 8         (3) Except as otherwise provided in this section,

 9    "compensation" means all wages, salaries, fees, bonuses,

10    commissions, or other payments made in the taxable year on behalf

11    of or for the benefit of employees, officers, or directors of the


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 1    taxpayers and subject to or specifically exempt from withholding

 2    under  chapter 24,  sections 3401 to 3406 of the internal revenue

 3    code.  Compensation includes, on a cash or accrual basis consis-

 4    tent with the taxpayer's method of accounting for federal income

 5    tax purposes, payments to state and federal unemployment compen-

 6    sation funds, payments under the federal insurance contribution

 7    act and similar social insurance programs, payments, including

 8    self-insurance, for worker's compensation insurance, payments to

 9    individuals not currently working, payments to dependents and

10    heirs of individuals because of current or former labor services

11    rendered by those individuals, payments to a pension, retirement,

12    or profit sharing plan, and payments for insurance for which

13    employees are the beneficiaries, including payments under health

14    and welfare and noninsured benefit plans and payments of fees for

15    the administration of health and welfare and noninsured benefit

16    plans.  Compensation does not include any of the following:

17         (a) Discounts on the price of the taxpayer's merchandise or

18    services sold to the taxpayer's employees, officers, or directors

19    that are not available to other customers.

20         (b) Payments to an independent contractor.

21         (c) For tax years beginning after December 31, 1994, pay-

22    ments to state and federal unemployment compensation funds.

23         (d) For tax years beginning after December 31, 1994, the

24    employer's portion of payments under the federal insurance con-

25    tribution act, the railroad retirement tax act, chapter 22 of

26    title 26 of the United States Code, 26 U.S.C. 3201 to 3233, and

27    similar social insurance programs.



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 1         (e) For tax years beginning after December 31, 1994,

 2    payments, including self-insurance payments, for worker's compen-

 3    sation insurance or federal employers liability act insurance

 4    pursuant to chapter 149, 35 Stat. 65, 45 U.S.C. 51 to 60.

 5         (F) FOR TAX YEARS THAT BEGIN AFTER DECEMBER 31, 1997, COM-

 6    PENSATION PAID IN THE TAX YEAR BY A PERSON LICENSED TO OPERATE A

 7    CASINO UNDER THE MICHIGAN GAMING CONTROL AND REVENUE ACT,

 8    INITIATED LAW OF 1996, MCL 432.201 TO 432.216, TO EMPLOYEES WHO

 9    MEET BOTH OF THE FOLLOWING CRITERIA:

10         (i) THEY ARE RESIDENTS OF A CITY WITH A POPULATION OF

11    800,000 OR MORE AT THE TIME THE EXEMPTION FROM COMPENSATION IS

12    TAKEN UNDER THIS SUBDIVISION AND WERE RESIDENTS OF THAT CITY FOR

13    THE IMMEDIATELY PRECEDING 12 MONTHS.

14         (ii) THEY WERE EMPLOYED BY THE PERSON LICENSED TO OPERATE A

15    CASINO FOR AT LEAST 24 CONTINUOUS MONTHS.

16         (4) "Department" means the revenue division of the depart-

17    ment of treasury.























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