HOUSE BILL No. 4948
June 24, 1997, Introduced by Reps. DeVuyst, Green, Jelinek, Hale, Voorhees, Raczkowski, McBryde, Richner, Middaugh and Goschka and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending sections 506 and 522 (MCL 206.506 and 206.522), as
amended by 1996 PA 484.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 506. (1) "Eligible serviceperson", "eligible veteran",
2 and "eligible widow or widower" mean a serviceperson, veteran, or
3 widow or widower, whose income as defined in this chapter is not
4 more than $7,500.00 per year unless the serviceperson, veteran,
5 or widow or widower receives compensation paid by the veterans
6 administration or the armed forces of the United States for serv-
7 ice incurred disabilities and who meets the requirements of the
8 following schedule:
9
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1 Taxable
2 Value
3 War Person Service in War Disability % Allowance
4
5 Indian Veteran or 3 months, or 1 No $3,500.00
6 Civil veteran's day with dis- requirement
7 Spanish- widow or charge for serv-
8 American widower ice-connected
9 Mexican disability
10
11 World War I Widow or 3 months, or 1 No $2,500.00
12 World War II widower of day with dis- requirement
13 Korean nondisabled charge for serv-
14 or nonpen- ice-connected
15 sioned disability
16 veteran
17
18 All wars or Pensioned Any No $3,500.00
19 presidential veteran or requirement
20 executive veteran's
21 order or widow or
22 presidential widower
23 proclamation
24
25 All wars or Veteran with Any 10-50 $3,500.00
26 presidential service-con-
27 executive nected dis-
28 order or ability or
29 presidential veteran's
30 proclamation widow or
31 widower
32
33 All wars or Veteran with Any 60-70-80 $4,000.00
34 presidential service-con-
35 executive nected dis-
36 order or ability or
37 presidential veteran's
38 proclamation widow or
39 widower
40
41 All wars or Veteran with Any 90-100 $4,500.00
42 presidential service-con-
43 executive nected dis-
44 order or ability or
45 presidential veteran's
46 proclamation widow or
47 widower
48
49 All wars or Widow or Any No $4,500.00
50 presidential widower of requirement
51 executive veteran dying
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1 order or in service
2 presidential
3 proclamation
4
5 Current Serviceperson Any No $3,500.00
6 service or requirement
7 serviceperson's
8 widow or
9 widower
10
11 (2) FOR THE 1997 TAX YEAR AND EACH TAX YEAR AFTER THE 1997
12 TAX YEAR, THE TAXABLE VALUE ALLOWANCE UNDER SUBSECTION (1) SHALL
13 BE ADJUSTED BY MULTIPLYING THE TAXABLE VALUE ALLOWANCE FOR THE
14 PREVIOUS TAX YEAR BY A FRACTION, THE NUMERATOR OF WHICH IS THE
15 UNITED STATES CONSUMER PRICE INDEX FOR THE STATE FISCAL YEAR
16 ENDING IN THE TAX YEAR PRIOR TO THE TAX YEAR FOR WHICH THE
17 ADJUSTMENT IS BEING MADE AND THE DENOMINATOR OF WHICH IS THE
18 UNITED STATES CONSUMER PRICE INDEX FOR THE 1995-96 STATE FISCAL
19 YEAR. THE RESULTANT PRODUCT SHALL BE ROUNDED TO THE NEAREST
20 $100.00 INCREMENT WHICH SHALL BE THE TAXABLE VALUE ALLOWANCE FOR
21 THE TAX YEAR. AS USED IN THIS SECTION, "UNITED STATES CONSUMER
22 PRICE INDEX" MEANS THE UNITED STATES CONSUMER PRICE INDEX FOR ALL
23 URBAN CONSUMERS AS DEFINED AND REPORTED BY THE UNITED STATES
24 DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS.
25 Sec. 522. (1) The amount of a claim made pursuant to this
26 chapter shall be determined as follows:
27 (a) A claimant is entitled to a credit against the state
28 income tax liability equal to 60% of the amount by which the
29 property taxes on the homestead, or the credit for rental of the
30 homestead for the tax year, exceeds 3.5% of the claimant's house-
31 hold income for that tax year.
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1 (b) A claimant who is a senior citizen or a paraplegic,
2 hemiplegic, or quadriplegic is entitled to a credit against the
3 state income tax liability for the amount by which the property
4 taxes on the homestead, the credit for rental of the homestead,
5 or a service charge in lieu of ad valorem taxes as provided by
6 section 15a of the state housing development authority act of
7 1966, Act No. 346 of the Public Acts of 1966, being section
8 125.1415a of the Michigan Compiled Laws 1966 PA 346, MCL
9 125.1415A, for the tax year exceeds the percentage of the
10 claimant's household income for that tax year computed as
11 follows:
12
13 Household income Percentage
14 Not over $3,000.00 .0%
15 Over $3,000.00 but not over $4,000.00 1.0%
16 Over $4,000.00 but not over $5,000.00 2.0%
17 Over $5,000.00 but not over $6,000.00 3.0%
18 Over $6,000.00 3.5%
19 (c) A claimant who is totally and permanently disabled is
20 entitled to a credit against the state income tax liability equal
21 to 60% of the amount by which the property taxes on the home-
22 stead, or the credit for rental of the homestead or for a service
23 charge in lieu of ad valorem taxes as provided in section 15a of
24 Act No. 346 of the Public Acts of 1966 THE STATE HOUSING DEVEL-
25 OPMENT AUTHORITY ACT OF 1966, 1966 PA 346, MCL 125.1415A, for the
26 tax year, exceeds the percentage of the claimant's household
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1 income for that tax year based on the schedule in subdivision
2 (b).
3 (d) A claimant who is an eligible serviceperson, eligible
4 veteran, or eligible widow or widower is entitled to a credit
5 against the state income tax liability for a percentage of the
6 property taxes on the homestead for the tax year not in excess of
7 100% determined as follows:
8 (i) Divide the taxable value allowance specified in section
9 506 by the taxable value of the homestead or, if the eligible
10 serviceperson, eligible veteran, or eligible widow or widower
11 leases or rents a homestead, divide 17% of the total annual rent
12 paid for tax years before the 1994 tax year, or 20% of the total
13 annual rent paid for tax years after the 1993 tax year on the
14 property by the property tax rate on the property.
15 (ii) Multiply the property taxes on the homestead by the
16 percentage computed in subparagraph (i).
17 (e) A claimant who is blind is entitled to a credit against
18 the state income tax liability for a percentage of the property
19 taxes on the homestead for the tax year determined as follows:
20 (i) If the taxable value of the homestead is $3,500.00 or
21 less, 100% of the property taxes.
22 (ii) If the taxable value of the homestead is more than
23 $3,500.00, the percentage that $3,500.00 bears to the taxable
24 value of the homestead.
25 (2) A person who is qualified to make a claim under more
26 than 1 classification shall elect the classification under which
27 the claim is made.
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1 (3) Only 1 claimant per household for a tax year is entitled
2 to the credit, unless both the husband and wife filing a joint
3 return are blind, then each shall be considered a claimant.
4 (4) As used in this section, "totally and permanently
5 disabled" means disability as defined in section 216 of title II
6 of the social security act, 42 U.S.C. 416.
7 (5) A senior citizen who has a total household income for
8 the tax year of $6,000.00 or less and who for 1973 received a
9 senior citizen homestead exemption under former section 7c of the
10 general property tax act, Act No. 206 of the Public Acts of
11 1893 1893 PA 206, may compute the credit against the state
12 income tax liability for a percentage of the property taxes on
13 the homestead for the tax year determined as follows:
14 (a) If the taxable value of the homestead is $2,500.00 or
15 less, 100% of the property taxes.
16 (b) If the taxable value of the homestead is more than
17 $2,500.00, the percentage that $2,500.00 bears to the taxable
18 value of the homestead.
19 (6) For a return of less than 12 months, the claim shall be
20 reduced proportionately.
21 (7) The commissioner may prescribe tables that may be used
22 to determine the amount of the claim.
23 (8) The total credit allowed in this section for each year
24 after December 31, 1975 shall not exceed $1,200.00 per year.
25 (9) The total credit allowable under this act and part 361
26 (farmland and open space preservation) of the natural resources
27 and environmental protection act, Act No. 451 of the Public Acts
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1 of 1994, being sections 324.36101 to 324.36117 of the Michigan
2 Compiled Laws 1994 PA 451, MCL 324.36101 TO 324.36117, shall not
3 exceed the total property tax due and payable by the claimant in
4 that year. The amount by which the credit exceeds the property
5 tax due and payable shall be deducted from the credit claimed
6 under part 361 of Act No. 451 of the Public Acts of 1994 THE
7 NATURAL RESOURCES AND ENVIRONMENTAL PROTECTION ACT, 1994 PA 451,
8 MCL 324.36101 TO 324.36117.
9 (10) FOR THE 1997 TAX YEAR AND EACH TAX YEAR AFTER THE 1997
10 TAX YEAR, THE TAXABLE VALUE ALLOWANCE UNDER SUBSECTION (1)(E)
11 SHALL BE ADJUSTED BY MULTIPLYING THE TAXABLE VALUE ALLOWANCE FOR
12 THE PREVIOUS TAX YEAR BY A FRACTION, THE NUMERATOR OF WHICH IS
13 THE UNITED STATES CONSUMER PRICE INDEX FOR THE STATE FISCAL YEAR
14 ENDING IN THE TAX YEAR PRIOR TO THE TAX YEAR FOR WHICH THE
15 ADJUSTMENT IS BEING MADE AND THE DENOMINATOR OF WHICH IS THE
16 UNITED STATES CONSUMER PRICE INDEX FOR THE 1995-96 STATE FISCAL
17 YEAR. THE RESULTANT PRODUCT SHALL BE ROUNDED TO THE NEAREST
18 $100.00 INCREMENT WHICH SHALL BE THE TAXABLE VALUE ALLOWANCE FOR
19 THE TAX YEAR. AS USED IN THIS SECTION, "UNITED STATES CONSUMER
20 PRICE INDEX" MEANS THE UNITED STATES CONSUMER PRICE INDEX FOR ALL
21 URBAN CONSUMERS AS DEFINED AND REPORTED BY THE UNITED STATES
22 DEPARTMENT OF LABOR, BUREAU OF LABOR STATISTICS.
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