SENATE BILL NO. 405


   March 3, 1999, Introduced by Senator PETERS and referred to the
        Committee on Finance.



        A bill to amend 1975 PA 228, entitled

   "Single business tax act,"

   (MCL 208.1 to 208.145) by adding section 39d.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         SEC. 39D.  (1) FOR TAX YEARS THAT BEGIN ON AND AFTER JANUARY

 2    1, 2000 AND BEFORE JANUARY 1, 2005, A QUALIFIED TAXPAYER MAY

 3    CLAIM A CREDIT AGAINST THE TAX IMPOSED BY THIS ACT EQUAL TO 50%

 4    OF THE COSTS PAID BY THE TAXPAYER TO ESTABLISH A QUALIFIED

 5    RETIREMENT PLAN OR $1,500.00, WHICHEVER IS LESS.

 6         (2) A TAXPAYER SHALL CLAIM THE CREDIT ALLOWED UNDER THIS

 7    SECTION ONLY IN THE 1 TAX YEAR IN WHICH THE QUALIFIED RETIREMENT

 8    PLAN IS FIRST ESTABLISHED BY THE TAXPAYER.

 9         (3) IF THE CREDIT ALLOWED UNDER THIS SECTION EXCEEDS THE TAX

10    LIABILITY OF THE TAXPAYER FOR THE TAX YEAR, THE EXCESS SHALL BE

11    REFUNDED TO THE TAXPAYER.


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 1         (4) AS USED IN THIS SECTION:

 2         (A) "QUALIFIED RETIREMENT PLAN" MEANS A PROGRAM THAT PRO-

 3    VIDES RETIREMENT OR PENSION BENEFITS FOR ALL EMPLOYEES IMPLE-

 4    MENTED BY A TAXPAYER THAT HAS NOT PREVIOUSLY OFFERED ANY RETIRE-

 5    MENT OR PENSION PLAN OR PROGRAM TO HIS OR HER EMPLOYEES.

 6         (B) "QUALIFIED TAXPAYER" MEANS A TAXPAYER WITH 20 OR FEWER

 7    EMPLOYEES THAT OFFERS THE QUALIFIED RETIREMENT PLAN TO ALL

 8    EMPLOYEES.

 9         (C) "RETIREMENT OR PENSION BENEFITS" MEANS ALL OF THE

10    FOLLOWING:

11         (i) RETIREMENT OR PENSION BENEFITS AS DEFINED IN SECTION
             30

12    OF THE INCOME TAX ACT OF 1967, 1967 PA 281, MCL 206.30.

13         (ii) ANY DISTRIBUTIONS FROM A 401(k) PLAN.































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