SB-0493, As Passed Senate, June 18, 2009

SUBSTITUTE FOR

SENATE BILL NO. 493

A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending section 431c (MCL 208.1431c), as added by 2008 PA 88.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

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

section, a qualified taxpayer may claim a credit against the tax

imposed by this act equal to the sum of up to 5.0% of the taxable

value of each qualified supplier's or qualified customer's taxable

property that is located within the 10-mile radius of the qualified

taxpayer or is located in the same county or a county adjacent to

the qualified taxpayer and within an existing industrial site that

is approved by the Michigan economic growth authority and that is

subject to collection of general ad valorem taxes under the general

property tax act, 1893 PA 206, MCL 211.1 to 211.155, and that

credit may be based upon each of the qualified supplier's and

qualified customer's taxable value described above in this

subsection for a period of up to 5 years, as determined by the

Michigan economic growth authority. If a qualified supplier's or

qualified customer's taxable property that is located within the

10-mile radius of the qualified taxpayer or is located in the same

county or a county adjacent to the qualified taxpayer and within an

existing industrial site that is approved by the Michigan economic

growth authority is subject to the specific tax levied under 1974

PA 198, MCL 207.551 to 207.572, the qualified taxpayer may only

include up to 2.5% of the taxable value of that property in the

calculation of the amount of the credit allowed under this section.

(2) The Michigan economic growth authority shall not designate

more than 5 ~~taxpayers as an anchor company~~ new anchor companies in

each calendar year and shall not approve more than 5 new credits in

each calendar year under this subsection. ~~A taxpayer~~ An anchor

company has 5 years from the date on which the ~~taxpayer is~~

~~designated as an~~ anchor company designation occurs to seek

certification from the Michigan economic growth authority as a

qualified taxpayer for each qualified supplier or qualified

customer ~~for which a credit is sought~~ that is included in the

credit which that anchor company is seeking under this section.

However, a credit shall not be provided for a tax year prior to the

tax year during which the designation as an anchor company is made.

(3) The Michigan economic growth authority may provide that

qualified sales to a qualified customer shall not be considered in

calculating the sales factor under this act for the tax year for

Senate Bill No. 493 as amended June 18, 2009

which a credit is provided under this section. <<Not later than July 1 of

each year, the Michigan economic growth authority shall disclose to the senate majority leader or his or her designee, the speaker of the house of representatives or his or her designee, and the chairperson of each standing committee of the house of representatives and the senate that primarily addresses and has jurisdiction over issues pertaining to taxation, finance, and economic development the name and address of each qualified customer whose sales are not considered in the sales factor pursuant to this subsection.>>

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

unless the Michigan economic growth authority has issued a

certificate to the ~~qualified~~ taxpayer. ~~However, a credit shall not~~

~~be provided for a tax year prior to the tax year during which the~~

~~certification is issued.~~ The qualified 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

taxpayer for the designated tax year.

the Michigan department of treasury number assigned to the

taxpayer.

(d) Subject to subsection (3), the amount of the qualified

sales to a qualified customer.

(5) ~~(3)~~ A qualified taxpayer that claims a credit under this

section and subsequently fails to meet the requirements of this

section or any other conditions ~~established by~~ included in an

agreement entered into with the Michigan economic growth authority

in order to obtain a certificate for which the credit was claimed

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 qualified

taxpayer in the year that the qualified taxpayer fails to comply

with this section or the agreement.

(6) ~~(4)~~ If the credit allowed under this subsection exceeds

the liability of the qualified taxpayer for the tax year, the

qualified taxpayer may elect to have that portion that exceeds the

tax liability of the qualified taxpayer refunded or to have the

excess carried forward to offset tax liability in subsequent years

for 5 years or until it is used up, whichever occurs first.

(7) A credit under this section may be taken after all other

allowable nonrefundable credits under this act.

(8) ~~(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 qualified

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.

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 qualified customer.

(ii) An employee leasing company on behalf of a qualified

supplier or qualified customer.

(iii) A professional employer organization on behalf of a

qualified supplier or qualified 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 qualified customer at a facility or

facilities that is in excess of the number of full-time jobs a

qualified supplier or qualified customer maintained in this state

or facility prior to the expansion or location, as determined by

the authority.

(f) "Qualified sales to a qualified customer" means sales to a

qualified customer that are in excess of the Michigan sales to the

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 and "qualified customer" ~~means~~

mean 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 ~~1 or more~~ a

qualified ~~suppliers~~ supplier or ~~customers~~ qualified customer to

open, locate, or expand ~~their business~~ in this state and conduct

business activity within a 10-mile radius of the anchor company or

within the same county or a county adjacent to the taxpayer and

within an existing industrial site that is approved by the Michigan

economic growth authority.

Enacting section 1. This amendatory act is retroactive and is

effective for tax years that begin after December 31, 2008.

Enacting section 2. This amendatory act does not take effect

unless all of the following bills of the 95th Legislature are

enacted into law:

(a) Senate Bill No. 358.

(b) Senate Bill No. 428.