April 27, 2006, Introduced by Rep. Moolenaar and referred to the Committee on Tax Policy.
A bill to amend 1975 PA 228, entitled
"Single business tax act,"
by amending sections 39e and 73 (MCL 208.39e and 208.73), section
39e as amended by 2002 PA 622 and section 73 as amended by 1995 PA
80.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 39e. (1) A taxpayer may claim a credit against the tax
imposed by this act for 1 or more of the following as applicable:
(a) The credit allowed under subsection (2).
(b) The credit allowed under subsection (6).
(2) For tax years that begin after December 31, 2002, a
taxpayer that is certified under the Michigan next energy authority
act, 2002 PA 593, MCL 207.821 to 207.827, as an eligible taxpayer
may claim a nonrefundable credit for the tax year equal to the
amount determined under subdivision (a) or (b), whichever is less:
(a) The amount by which the taxpayer's tax liability
attributable to qualified business activity for the tax year
exceeds the taxpayer's baseline tax liability attributable to
qualified business activity.
(b) For tax years that begin after December 31, 2002, 10% of
the amount by which the taxpayer's adjusted qualified business
activity performed in this state outside of a renaissance zone for
the tax year exceeds the taxpayer's adjusted qualified business
activity performed in this state outside of a renaissance zone for
the 2001 tax year.
(3) For any tax year in which the eligible taxpayer's tax
liability attributable to qualified business activity for the tax
year does not exceed the taxpayer's baseline tax liability
attributable to qualified business activity, the eligible taxpayer
shall not claim the credit allowed under subsection (2).
(4) An affiliated group as defined in this act, a controlled
group of corporations as defined in section 1563 of the internal
revenue
code and further described in 26 C.F.R. CFR
1.414(b)-1
and 1.414(c)-1 to 1.414(c)-5, or an entity under common control as
defined by the internal revenue code shall not take the credit
allowed under subsection (2) unless the qualified business activity
of the group or entities is consolidated.
(5) A taxpayer that claims a credit under subsection (2) shall
attach a copy of each of the following as issued pursuant to the
Michigan next energy authority act, 2002 PA 593, MCL 207.821 to
207.827, to the annual return required under this act for each tax
year in which the taxpayer claims the credit allowed under
subsection (2):
(a) The proof of certification that the taxpayer is an
eligible taxpayer for the tax year.
(b) The proof of certification of the taxpayer's tax liability
attributable to qualified business activity for the tax year.
(c) The proof of certification of the taxpayer's baseline tax
liability attributable to qualified business activity.
(6) For tax years that begin after December 31, 2002, a
taxpayer that is a qualified alternative energy entity may claim a
credit for the taxpayer's qualified payroll amount. A taxpayer
shall claim the credit under this subsection after all allowable
nonrefundable credits under this act.
(7) If the credit allowed under subsection (6) exceeds the tax
liability of the taxpayer for the tax year, that portion of the
credit that exceeds the tax liability shall be refunded.
(8)
Notwithstanding any other provision of this act and for
tax
years that begin after December 31, 2002, a person whose
apportioned
or allocated gross receipts are less than $350,000.00
for
the tax year need not file a return or pay the tax as provided
under
this act.
(8) (9)
As used in this section:
(a) "Adjusted qualified business activity performed in this
state outside of a renaissance zone" means either of the following:
(i) Except as provided in subparagraph (ii), the taxpayer's
payroll for qualified business activity performed in this state
outside of a renaissance zone.
(ii) For a partnership, limited liability company, S
corporation, or individual, the amount determined under
subparagraph (i) plus the product of the following as related to the
taxpayer:
(A) Business income.
(B) The apportionment factor as determined under chapter 3.
(C) The alternative energy business activity factor.
(b) "Alternative energy business activity factor" means a
fraction the numerator of which is the ratio of the value of the
taxpayer's property used for qualified business activity and
located in this state outside of a renaissance zone for the year
for which the factor is being calculated to the value of all of the
taxpayer's property located in this state for that year plus the
ratio of the taxpayer's payroll for qualified business activity
performed in this state outside of a renaissance zone for that year
to all of the taxpayer's payroll in this state for that year and
the denominator of which is 2.
(c) "Alternative energy marine propulsion system",
"alternative energy system", "alternative energy vehicle", and
"alternative energy technology" mean those terms as defined in the
Michigan next energy authority act, 2002 PA 593, MCL 207.821 to
207.827.
(d) "Alternative energy zone" means a renaissance zone
designated as an alternative energy zone by the board of the
Michigan strategic fund under section 8a of the Michigan
renaissance zone act, 1996 PA 376, MCL 125.2688a.
(e) "Baseline tax liability attributable to qualified business
activity" means the taxpayer's tax liability for the 2001 tax year
multiplied by the taxpayer's alternative energy business activity
factor for the 2001 tax year. A taxpayer with a 2001 tax year of
less than 12 months shall annualize the amount calculated under
this subdivision as necessary to determine baseline tax liability
attributable to qualified business activity that reflects a 12-
month period.
(f) "Eligible taxpayer" means a taxpayer that has proof of
certification of qualified business activity under the Michigan
next energy authority act, 2002 PA 593, MCL 207.821 to 207.827.
(g) "Payroll" means total salaries and wages before deducting
any personal or dependency exemptions.
(h) "Qualified alternative energy entity" means a taxpayer
located in an alternative energy zone.
(i) "Qualified business activity" means research, development,
or manufacturing of an alternative energy marine propulsion system,
an alternative energy system, an alternative energy vehicle,
alternative energy technology, or renewable fuel.
(j) "Qualified employee" means an individual who is employed
by a qualified alternative energy entity, whose job
responsibilities are related to the research, development, or
manufacturing activities of the qualified alternative energy
entity, and whose regular place of employment is within an
alternative energy zone.
(k) "Qualified payroll amount" means an amount equal to
payroll of the qualified alternative energy entity attributable to
all qualified employees in the tax year of the qualified
alternative energy entity for which the credit under subsection (6)
is being claimed, multiplied by the tax rate for that tax year.
(l) "Renaissance zone" means a renaissance zone designated
under the Michigan renaissance zone act, 1996 PA 376, MCL 125.2681
to 125.2696.
(m) "Renewable fuel" means 1 or more of the following:
(i) Biodiesel or biodiesel blends containing at least 20%
biodiesel. As used in this subparagraph, "biodiesel" means a diesel
fuel substitute consisting of methyl or ethyl esters produced from
the transesterification of animal or vegetable fats with methanol
or ethanol.
(ii) Biomass. As used in this subparagraph, "biomass" means
residues from the wood and paper products industries, residues from
food production and processing, trees and grasses grown
specifically to be used as energy crops, and gaseous fuels produced
from solid biomass, animal wastes, municipal waste, or landfills.
(n) "Tax liability attributable to qualified business
activity" means the taxpayer's tax liability multiplied by the
taxpayer's alternative energy business activity factor for the tax
year.
(o) "Tax rate" means the rate imposed under sections 51, 51d,
and 51e of the income tax act of 1967, 1967 PA 281, MCL 206.51,
206.51d, and 206.51e, annualized as necessary, for the tax year in
which the qualified alternative energy entity claims a credit under
subsection (6).
Sec. 73. (1) An annual or final return shall be filed with the
department in the form and content prescribed by the department by
the last day of the fourth month after the end of the taxpayer's
tax year. Any final liability shall be remitted with this return. A
person whose apportioned or allocated gross receipts plus the
adjustments provided in section 23b(a), (b), and (c) are less than
the following amount for the appropriate year need not file a
return or pay the tax provided under this act:
(a) $40,000.00 for tax years beginning before January 1, 1991.
(b) $60,000.00 for tax years beginning after December 31, 1990
and before January 1, 1992.
(c) $100,000.00 for tax years beginning after December 31,
1991 and before January 1, 1994.
(d) $137,500.00 for tax years beginning after December 31,
1993 and before January 1, 1995.
(e) $250,000.00 for tax years beginning after December 31,
1994 and before January 1, 2003.
(f) $350,000.00 for tax years beginning after December 31,
2002 and before January 1, 2006.
(g) $1,000,000.00 for tax years beginning after December 31,
2005.
(2) For a person whose apportioned or allocated gross receipts
plus the adjustments provided in section 23b(a), (b), and (c), are
for a tax year less than 12 months, the amount in subsection (1)
shall be multiplied by a fraction, the numerator of which is the
number of months in the tax year and the denominator of which is
12.
(3) The commissioner upon application of the taxpayer and for
good cause shown may extend the date for filing the annual return.
Interest at the rate of 9% per annum shall be added to the amount
of the tax unpaid for the period of the extension. The commissioner
shall require a tentative return and payment of an estimated tax.
(4) If a taxpayer is granted an extension of time within which
to file the federal income tax return for any taxable year, the
filing of a copy of the request for extension together with a
tentative return and payment of an estimated tax with the
commissioner by the due date provided in subsection (1) shall
automatically extend the due date for the filing of a final return
under this act for an equivalent period plus 60 days. Interest at
the rate of 9% per annum shall be added to the amount of the tax
unpaid for the period of the extension.
(5) For tax years that end after July 6, 1994, an affiliated
group as defined in this act, a controlled group of corporations as
defined in section 1563 of the internal revenue code and further
described
in 26 C.F.R. CFR
1.414(b)-1 and 1.414(c)-1 to 1.414(c)-
5, or an entity under common control as defined in the internal
revenue code shall consolidate the gross receipts of the members of
the affiliated group, member corporations of the controlled group,
or entities under common control that have apportioned or allocated
gross receipts, plus the adjustments provided in section 23b(a),
(b), and (c), of $100,000.00 or more to determine if the group or
entity shall pay a tax or file a return as provided under
subsection (1). An individual member of an affiliated group or
controlled group of corporations or an entity under common control
is not required to file a return or pay the tax under this act if
that member or entity has apportioned or allocated gross receipts,
plus the adjustments provided in section 23b(a), (b), and (c), of
less than $100,000.00.