May 4, 2010, Introduced by Reps. Agema, Amash, McMillin, DeShazor, Haveman, Paul Scott, Green, Meekhof, Meltzer, Walsh, Crawford, Lund, Rogers, Genetski, Kowall and Booher and referred to the Committee on Tax Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending sections 431a, 431b, and 431c (MCL 208.1431a,
208.1431b, and 208.1431c), section 431a as amended by 2009 PA 159,
section 431b as added by 2008 PA 109, and section 431c as amended
by 2009 PA 160.
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 equal to the sum of up to 100% of each
qualified supplier's and qualified 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 and that credit may include each of the qualified
supplier's and qualified customer's payroll described above 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 new anchor
companies in each calendar year and shall not approve more than 5
new credits in each calendar year under this subsection. An anchor
company has 5 years from the date on which the anchor company is
designated as an anchor company to seek certification from the
Michigan economic growth authority as a qualified taxpayer for each
qualified supplier and qualified customer that is included in the
credit which that anchor company is seeking under this section. The
Michigan economic growth authority shall not designate a taxpayer
as an anchor company after December 31, 2010 and shall not approve
any new credits under this section after December 31, 2010.
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.
(2) The Michigan economic growth authority may also 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 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.
(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 to a qualified customer.
(d) The taxpayer's federal employer identification number or
the Michigan department of treasury number assigned to the
taxpayer.
(4) A qualified 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) 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 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 at a 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)
"Qualified supplier" 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 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) "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 qualified
supplier or qualified 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.
Sec. 431b. (1) Upon application through December 31, 2010, a
person or group of persons acting collectively may enter into an
agreement with the Michigan economic growth authority for a credit
under this section. In determining whether to enter into an
agreement with a person or group of persons, the authority shall
consider the following factors:
(a) The number of qualified new jobs or products, or both, to
be created or maintained as a result of winning a federal
procurement contract offered by the United States department of
defense, department of energy, or department of homeland security.
(b) The potential impact of the expansion, retention, or
location on the economy of Michigan if the person or group of
persons acting collectively is awarded the federal contract
described under subdivision (a).
(c) The number of out-of-state persons bidding against the
person or group of persons acting collectively for the federal
contract described under subdivision (a).
(d) The total capital investment or new capital investment the
person or group of persons acting collectively will make to win and
maintain the federal contract described under subdivision (a).
(2) The agreement required under subsection (1) shall include,
but is not limited to, all of the following:
(a) A description of the federal contract for which the person
or group of persons acting collectively intends to bid.
(b) A description of the person's or group's expansion,
retention, or location that is necessary if awarded the federal
contract that is the subject of the agreement.
(c) Conditions upon which the person or group of persons
acting collectively is designated a qualified taxpayer under this
section.
(d) A statement by the person or group of persons acting
collectively that a violation of the written agreement may result
in the revocation of the designation as a qualified taxpayer and
the loss or reduction of future credits under this section.
(e) A statement by the person or group of persons acting
collectively that a misrepresentation in the application may result
in the revocation of the designation as a qualified taxpayer and
the refund of credits received under this section.
(f) A method for measuring qualified new jobs before and after
the award of a federal contract and the expansion, retention, or
location of the person or group of persons acting collectively in
this state as a result of winning the federal contract.
(3) A qualified taxpayer may claim a credit against the tax
imposed by this act in an amount up to 100% of the qualified
taxpayer's payroll attributable to employees who perform qualified
new jobs created as a result of the person or group of persons
acting collectively being awarded a federal procurement contract by
the United States department of defense, department of energy, or
department of homeland security as determined by the Michigan
economic growth authority, multiplied by the tax rate for the tax
year for a period of up to 7 years or the term of the contract,
whichever is less, as determined by the Michigan economic growth
authority. If the qualified taxpayer is a group of persons acting
collectively, the Michigan economic growth authority shall
determine the amount of the credit which each person included in
the group is allowed to claim by multiplying the amount of the
credit allowed collectively by the qualified taxpayer by a
fraction, the numerator of which is the person's payroll
attributable to employees who perform qualified new jobs and the
denominator of which is 100% of the qualified taxpayer's payroll
attributable to employees who perform qualified new jobs, and then
certifying the amount of the credit that each person is allowed to
claim respectively. 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 execute more than 10 new written
agreements each year. If a qualified taxpayer is awarded a credit
under this section, any subsequent credits awarded to that
qualified taxpayer shall not be included in determining the yearly
limit of 10 new agreements under this subsection.
(4) A taxpayer shall not claim a credit under this section
unless the Michigan economic growth authority has issued the
taxpayer a certificate of designation as a qualified taxpayer.
However, a credit shall not be provided for a tax year prior to the
tax year during which the certification is made. 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.
(b) The amount of the credit under this section for the
qualified taxpayer for the designated tax year or, if the qualified
taxpayer is a group of persons, the percentage of the amount of the
credit that the taxpayer is allowed to claim for the designated tax
year.
(c) The taxpayer's federal employer identification number or
the Michigan department of treasury number assigned to the
taxpayer.
(5) As used in this section:
(a) "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 taxpayer.
(ii) An employee leasing company on behalf of a taxpayer.
(iii) A professional employer organization on behalf of a
taxpayer.
(b) "Michigan economic growth authority" or "authority" means
the Michigan economic growth authority created in the Michigan
economic growth authority act, 1995 PA 24, MCL 207.801 to 207.810.
(c) "Qualified new job" means a full-time job created by a
qualified taxpayer at a facility or facilities that is in excess of
the number of full-time jobs the qualified taxpayer maintained in
this state or at a facility prior to being awarded the federal
procurement contract and the expansion or location, as determined
by the authority.
(d) "Qualified taxpayer" means a person that individually
satisfies each of the following or a group of 1 or more persons
that enter into a cooperative or informal agreement to act
collectively and satisfy each of the following:
(i) Has entered into an agreement with the authority as
described under this section.
(ii) Has submitted a competitive bid for a federal procurement
contract offered by the United States department of defense,
department of energy, or department of homeland security.
(iii) Has been awarded the federal contract for which the person
or group of persons acting collectively submitted a bid under
subparagraph (ii).
(iv) Has created a minimum of 25 qualified new jobs.
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 customer's taxable property
that is located within the 10-mile radius of the qualified taxpayer
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,
for a period of up to 5 years, as determined by the Michigan
economic growth authority. If a qualified supplier's or customer's
taxable property 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.
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. The Michigan economic growth authority shall
not designate a taxpayer as an anchor company after December 31,
2010 and shall not approve any new credits under this section after
December 31, 2010. A taxpayer has 5 years from the date on which
the taxpayer is designated as an anchor company to seek
certification as a qualified taxpayer for each qualified supplier
or customer for which a credit is sought under this section.
(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.
(c) The taxpayer's federal employer identification number or
the Michigan department of treasury number assigned to the
taxpayer.
(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 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.
(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.
(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 facility prior to the
expansion or location, as determined by the authority.
(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, 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 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.
(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 qualified
suppliers or customers to open, locate, or expand their business
and conduct business activity within a 10-mile radius of the anchor
company.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 95th Legislature are
enacted into law:
(a) House Bill No. 5249.
(b) Senate Bill No.____ or House Bill No. 6104(request no.
04275'09).
(c) Senate Bill No.____ or House Bill No. 6103(request no.
05669'09).
(d) Senate Bill No.____ or House Bill No. 6105(request no.
05670'09).
(e) Senate Bill No.____ or House Bill No. 6106(request no.
05671'09).
(f) Senate Bill No.____ or House Bill No. 6107(request no.
05672'09).
(g) Senate Bill No.____ or House Bill No. 6112(request no.
05673'09).
(h) Senate Bill No.____ or House Bill No. 6109(request no.
05676'09).
(i) Senate Bill No.____ or House Bill No. 6110(request no.
05677'09).
(j) Senate Bill No.____ or House Bill No. 6116(request no.
05678'09).
(k) Senate Bill No.____ or House Bill No. 6114(request no.
05679'09).
(l) Senate Bill No.____ or House Bill No. 6117(request no.
05680'09).
(m) Senate Bill No.____ or House Bill No. 6108(request no.
05681'09).
(n) Senate Bill No.____ or House Bill No. 6119(request no.
05930'10).
(o) Senate Bill No.____ or House Bill No. 6111(request no.
05931'10).
(p) Senate Bill No.____ or House Bill No. 6115(request no.
05932'10).
(q) Senate Bill No.____ or House Bill No. 6118(request no.
05933'10).