SB-1190, As Passed House, April 10, 2008

SUBSTITUTE FOR

SENATE BILL NO. 1190

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending section 431 (MCL 208.1431).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 431. (1) ~~For~~ Except as otherwise provided under this

subsection, for a period of time not to exceed 20 years as

determined by the Michigan economic growth authority, a taxpayer

that is an authorized business ~~or an eligible taxpayer~~ may claim a

credit against the tax imposed by this act equal to the amount

certified each year by the Michigan economic growth authority as

follows:

(a) ~~For~~ Except as otherwise provided under this subdivision,

for an authorized business for the tax year, an amount not to

exceed the payroll of the authorized business attributable to

employees who perform qualified new jobs as determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810, multiplied by the tax rate; beginning after the effective

date of the amendatory act that added subdivision (d), for an

authorized business for the tax year, an amount not to exceed the

sum of the payroll and health care benefits of the authorized

business attributable to employees who perform qualified new jobs

as determined under the Michigan economic growth authority act,

1995 PA 24, MCL 207.801 to 207.810, multiplied by the tax rate.

(b) For an eligible business as determined under section

8(5)(a) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed 50% of the payroll of the

~~eligible taxpayer~~ authorized business attributable to employees who

perform retained jobs as determined under the Michigan economic

growth authority act, 1995 PA 24, MCL 207.801 to 207.810,

multiplied by the tax rate for the tax year.

8(5)(b) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed the payroll of the ~~eligible~~

~~taxpayer~~ authorized business attributable to employees who perform

retained jobs as determined under the Michigan economic growth

authority act, 1995 PA 24, MCL 207.801 to 207.810, multiplied by

the tax rate for the tax year.

(d) For an authorized business that is a qualified high-

technology business, for a period of time not to exceed 7 years as

determined by the Michigan economic growth authority, an amount not

to exceed 200% of the sum of the payroll and health care benefits

Senate Bill No. 1190 as amended March 25, 2008

of the qualified high-technology business attributable to employees

who perform qualified new jobs as determined under the Michigan

economic growth authority act, 1995 PA 24, MCL 207.801 to 207.810,

for the first 3 tax years of the credit, multiplied by the tax rate

and, for each of the remaining tax years of the credit, an amount

not to exceed 100% of the sum of the payroll and health care

benefits of the qualified high-technology business attributable to

employees who perform qualified new jobs as determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810, multiplied by the tax rate.

(e) For an authorized business as determined under section

8(9) of the Michigan economic growth authority act, 1995 PA 24, MCL

207.808, an amount <<up to, but not to exceed 100% of,>> the sum of the

payroll and health care

benefits of the authorized business attributable to employees who

perform retained jobs multiplied by a fraction<<,>> the numerator of

which is the amount of new capital investment made at the facility

and the denominator of which is the <<product of the>> number of retained

jobs <<multiplied by $100,000.00

>>, and then multiplied by the tax rate

for the tax year.

(f) For an authorized business as determined under section

8(11) of the Michigan economic growth authority act, 1995 PA 24,

MCL 207.808, an amount not to exceed 100% of the sum of the payroll

and health care benefits of the authorized business attributable to

employees who perform new full-time jobs and retained jobs as

determined under the Michigan economic growth authority act, 1995

PA 24, MCL 207.801 to 207.810, multiplied by the tax rate for the

tax year.

(2) A taxpayer shall not claim a credit under this section

unless the Michigan economic growth authority has issued a

certificate to the taxpayer. The taxpayer shall attach the

certificate to the annual return filed under this act on which a

credit under this section is claimed.

(3) The certificate required by subsection (2) shall state all

of the following:

(a) The taxpayer is an authorized business. ~~or an eligible~~

~~taxpayer.~~

(b) The amount of the credit under this section for the

authorized business ~~or eligible taxpayer~~ for the designated tax

year.

the Michigan department of treasury number assigned to the

taxpayer.

(4) The Michigan economic growth authority may certify a

credit under this section based on an agreement entered into prior

to January 1, 2008 pursuant to section 37c of former 1975 PA 228.

The number of years for which the credit may be claimed under this

section shall equal the maximum number of years designated in the

resolution reduced by the number of years for which a credit has

been claimed or could have been claimed under section 37c of former

1975 PA 228.

(5) If the credit allowed under this section exceeds the tax

liability of the taxpayer for the tax year, that portion of the

credit that exceeds the tax liability of the taxpayer shall be

refunded.

(6) A Except as otherwise provided under this subsection, a

taxpayer that claims a credit under subsection (1) or section 37c

or 37d of former 1975 PA 228, that has an agreement with the

Michigan economic growth authority based on qualified new jobs as

defined in section ~~3(n)(~~ii) 3(p)(ii) of the Michigan economic growth

authority act, 1995 PA 24, MCL 207.803, and that removes from this

state 51% or more of those qualified new jobs within 3 years after

the first year in which the taxpayer claims a credit described in

this subsection shall pay to the department no later than 12 months

after those qualified new jobs are removed from the state an amount

equal to the total of all credits described in this subsection that

were claimed by the taxpayer. Beginning after the effective date of

the amendatory act that added subsection (1)(d), a taxpayer that

claims a credit under subsection (1) and subsequently fails to meet

the requirements of this section or any other conditions included

in an agreement entered into with the Michigan economic growth

authority in order to obtain a certificate for the credit claimed

under this section or removes any of the qualified new jobs from

this state during the term of the written agreement and for a

period of years after the term of the written agreement, as

determined by the Michigan economic growth authority, may have its

credit reduced or terminated or have a percentage of the credit

amount previously claimed under this section added back to the tax

liability of the taxpayer in the tax year that the taxpayer fails

to comply with this section or the agreement.

(7) If the Michigan economic growth authority or a designee of

the Michigan economic growth authority requests that a taxpayer

that claims the credit under this section get a statement prepared

by a certified public accountant verifying that the actual number

of new jobs created is the same number of new jobs used to

calculate the credit under this section, the taxpayer shall get the

statement and attach that statement to its annual return under this

act on which the credit under this section is claimed.

(8) A credit shall not be claimed by a taxpayer under this

section if the taxpayer's initial certification as required in

subsection (3) is issued after December 31, 2013.

(9) For purposes of this section, taxpayer includes a person

subject to the tax imposed under chapters 2A and 2B.

(10) As used in this section:

(a) "Authorized business", "facility", "full-time job",

"qualified high-technology business", "retained jobs", and "written

agreement" mean those terms as defined in the Michigan economic

growth authority act, 1995 PA 24, MCL 207.801 to 207.810.

~~(b) "Eligible taxpayer" means an authorized business that~~

~~meets the criteria under section 8(5) of the~~ ~~Michigan~~ ~~economic~~

~~growth authority act, 1995 PA 24, MCL 207.808.~~

(b) "Health care benefits" means all costs paid for a self-

funded health care benefit plan or for an expense-incurred

hospital, medical, or surgical policy or certificate, nonprofit

health care corporation certificate, or health maintenance

organization contract. Health care benefit does not include

accident-only, credit, dental, or disability income insurance;

long-term care insurance; coverage issued as a supplement to

liability insurance; coverage only for a specified disease or

illness; worker's compensation or similar insurance; or automobile

medical payment insurance.

economic growth authority created in the Michigan economic growth

authority act, 1995 PA 24, MCL 207.801 to 207.810.

(d) "Payroll" means the total salaries and wages before

deducting any personal or dependency exemptions.

(e) "Qualified new jobs" means 1 or more of the following:

(i) The average number of full-time jobs at a facility of an

authorized business for a tax year in excess of the average number

of full-time jobs the authorized business maintained in this state

prior to the expansion or location as that is determined under the

Michigan economic growth authority act, 1995 PA 24, MCL 207.801 to

207.810.

(ii) The average number of full-time jobs at a facility created

by an eligible business ~~within 120~~ up to 90 days before becoming an

authorized business that is in excess of the average number of

full-time jobs that the business maintained in this state ~~120~~ up to

90 days before becoming an authorized business, as determined under

the Michigan economic growth authority act, 1995 PA 24, MCL 207.801

to 207.810.

(f) "Tax rate" means the rate imposed under section ~~51e~~ 51 of

the income tax act of 1967, 1967 PA 281, MCL ~~206.51e~~ 206.51, for

the tax year in which the tax year of the taxpayer for which the

credit is being computed begins.

Enacting section 1. This amendatory act does not take effect