June 26, 2008, Introduced by Senators ALLEN and CLARKE and referred to the Committee on Commerce and Tourism.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 431a (MCL 208.1431a), as added by 2008 PA 92.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 431a. (1) A qualified taxpayer may claim a credit against
the tax imposed by this act in an amount up to 100% of the
qualified supplier's or customer's payroll attributable to
employees who perform qualified new jobs as determined by the
Michigan economic growth authority, multiplied by the tax rate for
the tax year for a period of up to 5 years as determined by the
Michigan economic growth authority. If the credit allowed under
this subsection exceeds the liability of the taxpayer for the tax
year, the taxpayer may elect to have that portion that exceeds the
tax liability of the taxpayer refunded or to have the excess
carried forward to offset tax liability in subsequent years for 10
years or until it is used up, whichever occurs first. The Michigan
economic growth authority shall not designate more than 5 taxpayers
as an anchor company in each calendar year and shall not approve
more than 5 new credits in each calendar year under this
subsection. A taxpayer has 5 years from the date on which the
taxpayer is designated as an anchor company to seek certification
from the Michigan economic growth authority as a qualified taxpayer
for each qualified supplier or customer for which a credit is
sought under this section. However, a credit shall not be provided
for
a tax year prior to the tax year during which the certification
designation as an anchor company is made. If a qualified taxpayer
is awarded a credit under this subsection, any subsequent credits
awarded to that qualified taxpayer shall not be included in
determining the yearly limit of 5 new credits under this
subsection.
(2) The Michigan economic growth authority may also provide
that
qualified sales to a qualified supplier or customer are not
sales
in this state for purposes of shall
not be considered in
calculating the sales factor under this act for the tax year for
which
a credit is provided under this section. Qualified sales to a
qualified
supplier or customer are the total sales in this state to
a
qualified supplier or customer multiplied by a fraction, the
numerator
of which is the compensation on which the credit in this
section
is calculated and the denominator of which is the total
compensation
of the qualified supplier or customer in this state.
(3) 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 the
credit under this section is claimed. The certificate required by
this subsection shall state all of the following:
(a) The taxpayer is a qualified taxpayer and the date on which
the taxpayer was designated as an anchor company.
(b) The amount of the credit under this section for the
qualified taxpayer for the designated tax year.
(c)
The amount of the qualified sales calculated in accordance
with
the fraction described under subsection (2) to a qualified
supplier or customer.
(d) The taxpayer's federal employer identification number or
the Michigan department of treasury number assigned to the
taxpayer.
(4) A taxpayer that claims a credit under this section 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 which the credit was under this section may, as to be
determined by the Michigan economic growth authority, 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 year that the taxpayer fails to
comply with this section or the agreement.
(5) A credit under this section may be taken after all other
allowable nonrefundable credits under this act.
(6) (5)
As used in this section:
(a) "Anchor company" means a qualified high-technology
business that is an integral part of a high-technology activity and
that has the ability or potential ability to influence business
decisions and site location of qualified suppliers and customers.
(b) "Business", "qualified high-technology activity", and
"qualified high-technology business" mean those terms as defined in
the Michigan economic growth authority act, 1995 PA 24, MCL 207.801
to 207.810.
(c) "Full-time job" means a job performed by an individual for
35 hours or more each week and whose income and social security
taxes are withheld by 1 or more of the following:
(i) A qualified supplier or customer.
(ii) An employee leasing company on behalf of a qualified
supplier or customer.
(iii) A professional employer organization on behalf of a
qualified supplier or customer.
(d) "Michigan economic growth authority" means the Michigan
economic growth authority created in the Michigan economic growth
authority act, 1995 PA 24, MCL 207.801 to 207.810.
(e) "Qualified new job" means a full-time job created by a
qualified supplier or customer at a facility or facilities that is
in excess of the number of full-time jobs a qualified supplier or
customer maintained in this state or at a facility prior to the
expansion or location, as determined by the authority.
(f) "Qualified sales to a qualified supplier or customer"
means sales to a qualified supplier or customer that are in excess
of the Michigan sales to the supplier or customer prior to the year
of expansion or location within this state as determined by the
Michigan economic growth authority and that would otherwise be
included in the calculation of the sales factor under this act.
(g) (f)
"Qualified supplier or
customer" means a business that
opens a new location in this state, a business that locates in this
state, or an existing business located in this state that expands
its business within the last year as a result of an anchor company
and satisfies prior to the issuance of a certificate and at the
time specified in the agreement with the qualified taxpayer, as
certified by the Michigan economic growth authority, each of the
following:
(i) Has financial transactions with the anchor company.
(ii) Sells a critical or unique component or technology
necessary for the anchor company to market a finished product as
the result of a commercial relationship with the anchor company or
buys a critical or unique component from the anchor company.
(iii) Has created more than 10 qualified new jobs.
(iv) Has made an investment of at least $1,000,000.00 as
certified by the Michigan economic growth authority.
(h) (g)
"Qualified taxpayer"
means a taxpayer that was
designated by the Michigan economic growth authority as an anchor
company within the last 5 years and that has influenced a new
qualified supplier or customer to open, locate, or expand in this
state.
(i) "Tax rate" means the rate imposed under section 51 of the
income tax act of 1967, 1967 PA 281, MCL 206.51, for the tax year
in which the tax year of the taxpayer for which the credit is being
computed begins.