November 4, 2010, Introduced by Senators CASSIS and GILBERT and referred to the Committee on Finance.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 431 (MCL 208.1431), as amended by 2009 PA 126.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 431. (1) Except as otherwise provided under this
subsection
section, 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 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) 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 April 28, 2008, 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
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.
(c) For an eligible business as determined under section
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 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
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.
(b) The amount of the credit under this section for the
authorized business for the designated tax year.
(c) The taxpayer's federal employer identification number or
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 For a credit
certified under this section based on
an agreement entered into before December 1, 2010, if that 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. For a credit
certified under this section based on an agreement entered into on
or after December 1, 2010, if that credit allowed under this
section exceeds the tax liability of the taxpayer for the tax year,
that portion that exceeds the tax liability of the taxpayer shall
not be refunded.
(6) 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(q)(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 April 28, 2008, 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 the 2010 calendar year, and each calendar year after
2010,
the total amount of all credits
allowed to be claimed in the
first year of all new written agreements approved in that calendar
year under this section shall not exceed $95,000,000.00. For the
2011 calendar year and each calendar year after 2011, the total
amount of all credits allowed, for a period of time not to exceed 7
years as determined by the Michigan economic growth authority, to
be claimed in the first year of all new written agreements approved
in that calendar year under this section shall not exceed
$19,000,000.00, distributed as follows:
(a) Not more than 3 credits of not more than $3,000,000.00
each to an authorized business that agrees to create and retain a
minimum of 500 qualified new jobs for the duration of the credit
agreement.
(b) Not more than 10 credits of not more than $1,000,000.00
each to an authorized business that agrees to create and retain a
minimum of 100 qualified new jobs for the duration of the credit
agreement.
(10) For purposes of this section, taxpayer includes a person
subject to the tax imposed under chapter 2A and a person subject to
the tax imposed under chapter 2B.
(11) 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) "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.
(c) "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.
(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 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 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 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.