SB-0863, As Passed House, April 27, 2004

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 863

                                                                             A bill to amend 1967 PA 281, entitled                                             

"Income tax act of 1967,"                                                   

(MCL 206.1 to 206.532) by adding section 51f.                               

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1   Sec. 51f.  (1) For tax years that begin after December 31,                  

2   2004, a taxpayer that is a qualified start-up business that does            

3   not have business income attributable to that qualified start-up            

4   business for 2 consecutive tax years may claim a credit against             

5   the tax imposed under this act for the second of those 2                    

6   consecutive tax years and each immediately following consecutive            

7   tax year in which the taxpayer does not have business income                

8   attributable to that qualified start-up business equal to that              

9   portion of the taxpayer's tax liability attributable to that                

10  qualified start-up business for the tax year.  If the taxpayer              

11  has business income attributable to the qualified start-up                  

1   business in any tax year after the credit under this section is             

2   claimed, the taxpayer shall claim the credit under this section             

3   for any following tax year only if the taxpayer subsequently has            

4   no business income for 2 consecutive tax years.  The taxpayer may           

5   claim the credit for the second of those 2 consecutive tax years            

6   and each immediately following consecutive tax year in which the            

7   taxpayer does not have business income attributable to that                 

8   qualified start-up business.  A credit under this section shall             

9   not be claimed for more than a total of 5 tax years.                        

10      (2) If a taxpayer that took the credit under this section                   

11  has no business activity related to the qualified start-up                  

12  business in this state and has any business activity related to             

13  the qualified start-up business outside of this state for any of            

14  the first 3 tax years after the last tax year for which it took             

15  the credit under this section, the taxpayer shall add to its tax            

16  liability the following amounts:                                            

17      (a) If the taxpayer has no business activity in this state                  

18  related to the start-up business for the first tax year after the           

19  last tax year for which a credit under this section is claimed,             

20  100% of the total of all credits claimed under this section.                

21      (b) If the taxpayer has no business activity in this state                  

22  related to the start-up business for the second tax year after              

23  the last tax year for which a credit under this section is                  

24  claimed, 67% of the total of all credits claimed under this                 

25  section.                                                                    

26      (c) If the taxpayer has no business activity in this state                  

27  related to the start-up business for the third tax year after the           

Senate Bill No. 863 (H-2) as amended April 27, 2004

1   last tax year for which a credit under this section is claimed,             

2   33% of the total of all credits claimed under this section.                 

3       (3) As used in this section, "business income" and "qualified               

4   start-up business" mean those terms as defined in section 31a of            

5    the single business tax act, 1975 PA 228, MCL 208.31a.

[Enacting section 1. This amendatory act does not take effect unless House Bill No. 5331 of the 92nd Legislature is enacted into law.]