May 3, 2005, Introduced by Senators JACOBS, BERNERO, GOSCHKA, GARCIA, LELAND and THOMAS and referred to the Committee on Finance.
A bill to amend 1941 PA 122, entitled
"An act to establish the revenue collection duties of the
department of treasury; to prescribe its powers and duties as the
revenue collection agency of the state; to prescribe certain powers
and duties of the state treasurer; to regulate the importation,
stamping, and disposition of certain tobacco products; to provide
for the transfer of powers and duties now vested in certain other
state boards, commissions, departments and offices; to prescribe
certain duties of and require certain reports from the department
of treasury; to provide procedures for the payment, administration,
audit, assessment, levy of interests or penalties on, and appeals
of taxes and tax liability; to prescribe its powers and duties if
an agreement to act as agent for a city to administer, collect, and
enforce the city income tax act on behalf of a city is entered into
with any city; to provide an appropriation; to abolish the state
board of tax administration; to prescribe penalties and provide
remedies; and to declare the effect of this act,"
by amending section 24 (MCL 205.24), as amended by 2003 PA 201.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 24. (1) If a taxpayer fails or refuses to file a return
or pay a tax administered under this act within the time specified,
the department, as soon as possible, shall assess the tax against
the taxpayer and notify the taxpayer of the amount of the tax. A
liability for a tax administered under this act is subject to the
interest
and penalties prescribed in subsections (2)
to (5)
(8).
(2) Except as provided in subsections (3), (6), and (7), if a
taxpayer fails or refuses to file a return or pay a tax within the
time specified for notices of intent to assess issued on or before
February 28, 2003, a penalty of $10.00 or 5% of the tax, whichever
is greater, shall be added if the failure is for not more than 1
month, with an additional 5% penalty for each additional month or
fraction of a month during which the failure continues or the tax
and penalty is not paid, to a maximum of 50%. Except as provided in
subsections
(3), (6), and (7),
and (8), if a taxpayer fails or
refuses to file a return or pay a tax within the time specified for
notices of intent to assess issued after February 28, 2003, a
penalty of 5% of the tax shall be added if the failure is for not
more than 2 months, with an additional 5% penalty for each
additional month or fraction of a month during which the failure
continues or the tax and penalty is not paid, to a maximum of 25%.
In addition to the penalty, interest at the rate provided in
section 23 for deficiencies in tax payments shall be added on the
tax from the time the tax was due, until paid. After June 30, 1994,
the penalty prescribed by this subsection shall not be imposed
until the department submits for public hearing pursuant to the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, a rule defining what constitutes reasonable cause for
waiver of the penalty under subsection (4), which definition shall
include illustrative examples.
(3) If a person is required to remit tax due pursuant to
section 19(2) and fails or refuses to pay the tax within the time
specified, a penalty of 0.167% of the tax shall be added for each
day during which the failure continues or the tax and penalty are
not paid as follows:
(a) For notices of intent to assess issued on or before
February 28, 2003, to a maximum of 50% of the tax.
(b) For notices of intent to assess issued after February 28,
2003, to a maximum of 25% of the tax.
(4) If a return is filed or remittance is paid after the time
specified and it is shown to the satisfaction of the department
that the failure was due to reasonable cause and not to willful
neglect, the state treasurer or an authorized representative of the
state treasurer shall waive the penalty prescribed by subsection
(2).
(5) For failure or refusal to file an information return or
other informational report required by a tax statute, within the
time specified, a penalty of $10.00 per day for each day for each
separate failure or refusal may be added. The total penalty for
each separate failure or refusal shall not exceed $400.00.
(6) If a taxpayer fails to pay an estimated tax payment as may
be required by the income tax act of 1967, 1967 PA 281, MCL 206.1
to 206.532, a penalty shall not be imposed if the taxpayer was not
required to make estimated tax payments in the taxpayer's
immediately preceding tax year.
(7) Notwithstanding any other provision of this act, for any
return or tax remittance due on August 15, 2003 that was filed or
remitted not later than August 22, 2003, the department shall waive
all interest and penalty for the failure to file or remit for the
period of August 15, 2003 through August 22, 2003.
(8) If a taxpayer fails to pay an estimated tax payment as may
be required under the single business tax act, 1975 PA 228, MCL
208.1 to 208.145, a penalty of 2% of the estimated tax shall be
added to the estimated tax each month until paid, to a maximum of
6%.