April 29, 2009, Introduced by Reps. Mayes and Marleau and referred to the Committee on Tax Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending sections 400, 403, and 413 (MCL 208.1400, 208.1403, and
208.1413), section 403 as amended by 2008 PA 434 and section 413 as
amended by 2007 PA 145.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 400. (1) For purposes of this chapter, taxpayer does not
include a person subject to the tax imposed under chapter 2A or 2B
unless specifically included in the section.
(2) For purposes of this chapter, notwithstanding anything to
the contrary in this act or any other provision of law, a lessee
that leases property from a person subject to the tax imposed under
chapter 2A or 2B is considered the owner of that leased property
and is entitled to claim any credits under this chapter available
to an owner of such property.
Sec. 403. (1) Notwithstanding any other provision in this act,
the credits provided in this section shall be taken before any
other credit under this act. Except as otherwise provided in
subsection (6), for the 2008 tax year, the total combined credit
allowed under this section shall not exceed 50% of the tax
liability imposed under this act before the imposition and levy of
the surcharge under section 281. For the 2009 tax year and each tax
year after 2009, the total combined credit allowed under this
section shall not exceed 52% of the tax liability imposed under
this act before the imposition and levy of the surcharge under
section 281.
(2) Subject to the limitation in subsection (1), for the 2008
tax year a taxpayer may claim a credit against the tax imposed by
this act equal to 0.296% of the taxpayer's compensation in this
state. For the 2009 tax year and each tax year after 2009, subject
to the limitation in subsection (1), a taxpayer may claim a credit
against the tax imposed by this act equal to 0.370% of the
taxpayer's compensation in this state. For purposes of this
subsection, a taxpayer includes a person subject to the tax imposed
under chapter 2A and a person subject to the tax imposed under
chapter 2B. A professional employer organization shall not include
payments by the professional employer organization to the officers
and employees of a client of the professional employer organization
whose employment operations are managed by the professional
employer organization. A client may include payments by the
professional employer organization to the officers and employees of
the client whose employment operations are managed by the
professional employer organization.
(3) Subject to the limitation in subsection (1), for the 2008
tax year a taxpayer may claim a credit against the tax imposed by
this act equal to 2.32% multiplied by the result of subtracting the
sum of the amounts calculated under subdivisions (d), (e), and (f)
from the sum of the amounts calculated under subdivisions (a), (b),
and (c). Subject to the limitation in subsection (1), for the 2009
tax year and each tax year after 2009, a taxpayer may claim a
credit against the tax imposed by this act equal to 2.9% multiplied
by the result of subtracting the sum of the amounts calculated
under subdivisions (d), (e), and (f) from the sum of the amounts
calculated under subdivisions (a), (b), and (c):
(a) Calculate the cost, including fabrication and
installation, paid or accrued in the taxable year of tangible
assets of a type that are, or under the internal revenue code will
become, eligible for depreciation, amortization, or accelerated
capital cost recovery for federal income tax purposes, provided
that the assets are physically located in this state for use in a
business activity in this state and are not mobile tangible assets.
(b) Calculate the cost, including fabrication and
installation, paid or accrued in the taxable year of mobile
tangible assets of a type that are, or under the internal revenue
code will become, eligible for depreciation, amortization, or
accelerated capital cost recovery for federal income tax purposes.
This amount shall be multiplied by the apportionment factor for the
tax year as prescribed in chapter 3.
(c) For tangible assets, other than mobile tangible assets,
purchased or acquired for use outside of this state in a tax year
beginning after December 31, 2007 and subsequently transferred into
this state and purchased or acquired for use in a business
activity, calculate the federal basis used for determining gain or
loss as of the date the tangible assets were physically located in
this state for use in a business activity plus the cost of
fabrication and installation of the tangible assets in this state.
(d) If the cost of tangible assets described in subdivision
(a) was paid or accrued in a tax year beginning after December 31,
2007, or before December 31, 2007 to the extent the credit is used
and at the rate at which the credit was used under former 1975 PA
228 or this act, calculate the gross proceeds or benefit derived
from the sale or other disposition of the tangible assets minus the
gain, multiplied by the apportionment factor for the taxable year
as prescribed in chapter 3, and plus the loss, multiplied by the
apportionment factor for the taxable year as prescribed in chapter
3 from the sale or other disposition reflected in federal taxable
income and minus the gain from the sale or other disposition added
to the business income tax base in section 201.
(e) If the cost of tangible assets described in subdivision
(b) was paid or accrued in a tax year beginning after December 31,
2007, or before December 31, 2007 to the extent the credit is used
and at the rate at which the credit was used under former 1975 PA
228 or this act, calculate the gross proceeds or benefit derived
from the sale or other disposition of the tangible assets minus the
gain and plus the loss from the sale or other disposition reflected
in federal taxable income and minus the gain from the sale or other
disposition added to the business income tax base in section 201.
This amount shall be multiplied by the apportionment factor for the
tax year as prescribed in chapter 3.
(f) For assets purchased or acquired in a tax year beginning
after December 31, 2007, or before December 31, 2007 to the extent
the credit is used and at the rate at which the credit was used
under former 1975 PA 228 or this act, that were eligible for a
credit under subdivision (a) or (c) and that were transferred out
of this state, calculate the federal basis used for determining
gain or loss as of the date of the transfer.
(4) For a tax year in which the amount of the credit
calculated under subsection (3) is negative, the absolute value of
that amount is added to the taxpayer's tax liability for the tax
year.
(5) A taxpayer that claims a credit under this section is not
prohibited from claiming a credit under section 405. However, the
taxpayer shall not claim a credit under this section and section
405 based on the same costs and expenses.
(6) For a taxpayer primarily engaged in furnishing electric
and gas utility service that makes capital investments in electric
and gas distribution assets for which a portion of the credit
provided under subsection (3) would be denied for the 2008 tax year
by reason of the 50% limitation of subsection (1), the 50%
limitation on the total combined credit for the 2008 tax year
provided in subsection (1) shall be increased by an amount not to
exceed the lesser of the amount of the denied credit or 50% of the
tax increase under this act accrued for financial reporting
purposes due to the elimination of the deduction under section
168(k) of the internal revenue code by the amendatory act that
added this subsection. Provided, however, that the total combined
credit allowed under this section for the 2008 tax year shall not
exceed 80% of the tax liability imposed under this act after the
imposition and levy of the surcharge under section 281.
(7) A taxpayer that is a lessor of tangible assets described
under subsection (3) may elect to transfer the credit available
under subsection (3) to the lessee of those tangible assets. If the
taxpayer elects to transfer the credit to the lessee, the lessee is
subject to all applicable provisions and requirements of this
section.
Sec. 413. (1) Subject to subsection (2), a taxpayer may claim
a credit against the tax imposed by this act equal to the
following:
(a) For property taxes levied after December 31, 2007, 35% of
the amount paid for property taxes on eligible personal property in
the tax year.
(b) Twenty-three percent of the amount paid for property taxes
levied on eligible telephone personal property in the 2008 tax year
and 13.5% of the amount paid for property taxes levied on eligible
telephone personal property in subsequent tax years.
(c) For property taxes levied after December 31, 2007, 10% of
the amount paid for property taxes on eligible natural gas pipeline
property in the tax year.
(2) To qualify for the credit under subsection (1), the
taxpayer shall file, if applicable, within the time prescribed each
of the following:
(a) The statement of assessable personal property prepared
pursuant to section 19 of the general property tax act, 1893 PA
206, MCL 211.19, identifying the eligible personal property or
eligible natural gas pipeline property, or both, for which the
credit under subsection (1) is claimed.
(b) The annual report filed under section 6 of 1905 PA 282,
MCL 207.6, identifying the eligible telephone personal property for
which the credit under subsection (1) is claimed.
(c) The assessment or bill issued to and paid by the taxpayer
for the eligible personal property, eligible natural gas pipeline
property, or eligible telephone property for which the credit under
subsection (1) is claimed.
(3) If the amount of the credit allowed under this section
exceeds the tax liability of the taxpayer for the tax year, that
excess shall be refunded.
(4) A taxpayer that is a lessor of eligible personal property
may elect to transfer the credit available under this section to
the lessee of that eligible personal property. If the taxpayer
elects to transfer the credit to the lessee, the lessee is subject
to all applicable provisions and requirements of this section.
(5) (4)
As used in this section:
(a) "Eligible natural gas pipeline property" means natural gas
pipelines that are classified as utility personal property under
section 34c of the general property tax act, 1893 PA 206, MCL
211.34c, and are subject to regulation under the natural gas act,
15 USC 717 to 717z.
(b) "Eligible personal property" means personal property that
is classified as industrial personal property under section 34c of
the general property tax act, 1893 PA 206, MCL 211.34c, or in the
case of personal property that is subject to 1974 PA 198, MCL
207.551 to 207.572, is situated on land classified as industrial
real property under section 34c of the general property tax act,
1893 PA 206, MCL 211.34c.
(c) "Eligible telephone personal property" means personal
property of a telephone company subject to the tax levied under
1905 PA 282, MCL 207.1 to 207.21.
(d) "Property taxes" means any of the following:
(i) Taxes collected under the general property tax act, 1893 PA
206, MCL 211.1 to 211.155.
(ii) Taxes levied under 1974 PA 198, MCL 207.551 to 207.572.
(iii) Taxes levied under the obsolete property rehabilitation
act, 2000 PA 146, MCL 125.2781 to 125.2797.
(iv) Taxes levied under 1905 PA 282, MCL 207.1 to 207.21.