August 3, 2005, Introduced by Rep. Hoogendyk and referred to the Committee on Tax Policy.
A bill to amend 1975 PA 228, entitled
"Single business tax act,"
by amending section 31 (MCL 208.31), as amended by 1999 PA 115.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 31. (1) Except as provided in subsections (5) and (6),
there is levied and imposed a specific tax upon the adjusted tax
base of every person with business activity in this state that is
allocated or apportioned to this state at the following rates for
the specified periods:
(a) Before October 1, 1994, 2.35%.
(b) After September 30, 1994 and before January 1, 1999,
2.30%.
(c) Beginning January 1, 1999 and each January 1 after 1999,
the rate under this subsection shall be reduced as provided in
subsection (5).
(d) Beginning the effective date of the amendatory act that
added this subdivision, the rate under this subsection shall be
1.6%.
(2) As used in this section, "adjusted tax base" means the tax
base allocated or apportioned to this state pursuant to chapter 3
with the adjustments prescribed by sections 23 and 23b and the
exemptions prescribed by section 35. If the adjusted tax base
exceeds 50% of the sum of gross receipts plus the adjustments
provided in section 23b(a) to (g), apportioned or allocated to
Michigan with the apportionment fraction calculated pursuant to
chapter 3, the adjusted tax base may, at the option of the
taxpayer, be reduced by that excess. If a taxpayer reduces the
adjusted tax base under this subsection, the taxpayer is not
entitled to the adjustment provided in subsection (4) for the same
taxable year. This subsection does not apply to an adjusted tax
base under section 22a.
(3) The tax levied under this section and imposed is upon the
privilege of doing business and not upon income.
(4) In lieu of the reduction provided in subsection (2), a
person may elect to reduce the adjusted tax base by the percentage
that the compensation divided by the tax base exceeds 63%. The
deduction shall not exceed 37% of the adjusted tax base. For
purposes of computing the deduction allowed by this subsection, as
effective for the respective tax year, compensation does not
include amounts of compensation exempt from tax under section
35(1)(e). This subsection does not apply to an adjusted tax base
under section 22a.
(5) If the comprehensive annual financial report of this state
for a state fiscal year, published pursuant to section 494 of the
management and budget act, 1984 PA 431, MCL 18.1494, reports an
ending balance of more than $250,000,000.00 in the countercyclical
budget and economic stabilization fund created under section 351 of
the management and budget act, 1984 PA 431, MCL 18.1351, for that
state fiscal year, the tax rate under this section shall be reduced
by 0.1 percentage point on the January 1 following the end of the
state fiscal year for which the report was issued.
(6) The department shall annualize the rate under this section
as necessary, and the applicable annualized rate shall be imposed.