HB-4563,As Passed House,May 8, 2003

SUBSTITUTE FOR

HOUSE BILL NO. 4563

                                                                             A bill to amend 1967 PA 281, entitled                                             

"Income tax act of 1967,"                                                   

by amending section 365 (MCL 206.365), as amended by 1996                   

PA 448.                                                                     

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 365.  (1) Every employer, flow-through entity, casino                  

2   licensee, and race meeting licensee and track licensee required             

3   by this act to deduct and withhold taxes for a tax year on                  

4   compensation, share of income available for distribution,                   

5   winnings, or payoff on a winning ticket shall furnish to each               

6   employee, nonresident member, or person with winnings or a payoff           

7   on a winning ticket subject to withholding under this act on or             

8   before January 31 of the succeeding year a statement in duplicate           

9   of the total compensation, share of income available for                    

10  distribution, winnings, or payoff on a winning ticket paid during           

1   the tax year and the amount deducted or withheld.  , or, if                 

2   employment is terminated before the close of a calendar year by             

3   an employer who goes out of business or permanently ceases to be            

4   an employer in this state, within 30 days after the last payment            

5   of compensation. However, if employment is terminated before the           

6   close of a calendar year by an employer who goes out of business            

7   or permanently ceases to be an employer in this state, or a                 

8   flow-through entity, casino licensee, race meeting licensee, or             

9   track licensee goes out of business or permanently ceases to be a           

10  flow-through entity, casino licensee, race meeting licensee, or             

11  track licensee before the close of a calendar year, then the                

12  statement required by this subsection shall be issued within 30             

13  days after the last compensation, share of income available for             

14  distribution, winnings, or payoff of a winning ticket is paid. A            

15  duplicate of a statement made pursuant to this section and an               

16  annual reconciliation return, MI-W3, shall be filed with the                

17  department by February 28 of the succeeding year except that an             

18  employer, flow-through entity, casino licensee, and race meeting            

19  licensee and track licensee who goes out of business or                     

20  permanently ceases to be an employer, flow-through entity, casino           

21  licensee, and race meeting licensee and track licensee shall file           

22  the statement and the annual reconciliation return within 30 days           

23  after going out of business or permanently ceasing to be an                 

24  employer, flow-through entity, casino licensee, and race meeting            

25  licensee and track licensee.                                                

26      (2) Every employer, flow-through entity, casino licensee, and               

27  race meeting licensee and track licensee required by this act to            

1   deduct or withhold taxes from compensation, share of income                 

2   available for distribution, winnings, or payoff on a winning                

3   ticket shall make a return or report in form and content and at             

4   times as prescribed by the department.                                      

5       (3) Every employee, nonresident member, or person with                      

6   winnings or a payoff on a winning ticket subject to withholding             

7   under this act shall furnish to his or her employer, flow-through           

8   entity, casino licensee, and race meeting licensee and track                

9   licensee information required for the employer, flow-through                

10  entity, casino licensee, and race meeting licensee and track                

11  licensee to make an accurate withholding.  An employee,                     

12  nonresident member, or person with winnings or a payoff on a                

13  winning ticket subject to withholding under this act shall file             

14  with his or her employer, flow-through entity, casino licensee,             

15  and race meeting licensee and track licensee revised information            

16  within 10 days after a decrease in the number of exemptions or a            

17  change in status from a nonresident to a resident.  An employee             

18  shall file revised information with his or her employer within 10           

19  days after the employee completes the residency requirements                

20  under section 31(11)(d), and when a change of status occurs from            

21  resident of a renaissance zone to nonresident of a renaissance              

22  zone.  Within 10 days after an employer receives revised                    

23  information from an employee who completes the residency                    

24  requirements under section 31(11)(d), the employer shall forward            

25  a copy of that revised information to the department.  The                  

26  employee, nonresident member, or person with winnings or a payoff           

27  on a winning ticket subject to withholding under this act may               

1   file revised information when the number of exemptions increases            

2   or when a change in status occurs from that of a resident of this           

3   state to a nonresident of this state.  Revised information shall            

4   not be given retroactive effect for withholding purposes.  An               

5   employer, flow-through entity, casino licensee, and race meeting            

6   licensee and track licensee shall rely on this information for              

7   withholding purposes unless directed by the department to                   

8   withhold on some other basis.  If an employee, nonresident                  

9   member, or person with winnings or a payoff on a winning ticket             

10  subject to withholding under this act fails or refuses to furnish           

11  information, the employer, flow-through entity, casino licensee,            

12  and race meeting licensee and track licensee shall withhold the             

13  full rate of tax from the employee's total compensation, the                

14  nonresident member's share of income available for distribution,            

15  or the winnings of a person with winnings or a payoff on a                  

16  winning ticket subject to withholding under this act.  As used in           

17  this subsection, "renaissance zone" means a renaissance zone                

18  designated pursuant to the Michigan renaissance zone act,  Act              

19  No. 376 of the Public Acts of 1996, being sections 125.2681 to              

20  125.2696 of the Michigan Compiled Laws 1996 PA 376, MCL 125.2681           

21  to 125.2696.                                                                

22  (4) As used in this section:                                                

23      (a) "Casino" means that term as defined in section 110.                     

24      (b) "Casino licensee" means a person licensed to operate a                  

25  casino under the Michigan gaming control and revenue act, the               

26  Initiated Law of 1996, MCL 432.201 to 432.226.                              

27      (c) "Race meeting licensee" and "track licensee" mean a                     

1   person to whom a race meeting license or track license is issued            

2   pursuant to section 8 of the horse racing law of 1995, 1995 PA              

3   279, MCL 431.308.

4       Enacting section 1.  This amendatory act takes effect                       

5   October 1, 2003.                                                            

6       Enacting section 2.  This amendatory act does not take                      

7   effect unless Senate Bill No. ______ or House Bill No. ______               

8   (request no. 03228'03) of the 92nd Legislature is enacted into              

9   law.