SB-0847, As Passed House, December 19, 2014

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 847

      A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

by amending sections 272 and 522 (MCL 206.272 and 206.522),

section 272 as amended by 2011 PA 38 and section 522 as amended

by 2013 PA 206.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1        Sec. 272. (1) For the following tax years that begin after

 2  December 31, 2007, a taxpayer may credit against the tax imposed

 3  by this act an amount equal to the specified percentages of the

 4  credit the taxpayer is allowed to claim as a credit under section

 5  32 of the internal revenue code for a tax year on a return filed

 6  under this act for the same tax year:

 7        (a) For tax years that begin after December 31, 2007 and

 8  before January 1, 2009, 10%.

 1        (b) For tax years that begin after December 31, 2008 and

 2  before January 1, 2012, 20%.

 3        (c) For tax years that begin after December 31, 2011 and

 4  before January 1, 2016, 6%.

 5        (d) For tax years that begin after December 31, 2015, 20%.

 6        (2) If the credit allowed by this section exceeds the tax

 7  liability of the taxpayer for the tax year, the state treasurer

 8  shall refund the excess to the taxpayer without interest, except

 9  as provided in section 30 of 1941 PA 122, MCL 205.30.

10        Sec. 522. (1) The amount of a claim made pursuant to this

11  chapter shall be determined as follows:

12        (a) A claimant who is not a senior citizen is entitled to a

13  credit against the state income tax liability under this part

14  equal to 60% of the amount by which the property taxes on the

15  homestead, or the credit for rental of the homestead for the tax

16  year, exceeds 3.5% of the claimant's total household resources

17  for that tax year.

18        (b) A claimant who is a senior citizen is entitled to a

19  credit against the state income tax liability under this part

20  equal to the following:

21        (i) For a claimant with total household resources of

22  $21,000.00 or less, an amount as determined in accordance with

23  subdivision (c).

24        (ii) For a claimant with total household resources of more

25  than $21,000.00 and less than or equal to $22,000.00, an amount

26  equal to 96% of the difference between the property taxes on the

27  homestead or the credit for rental of the homestead for the tax

 1  year and 3.5% of total household resources.

 2        (iii) For a claimant with total household resources of more

 3  than $22,000.00 and less than or equal to $23,000.00, an amount

 4  equal to 92% of the difference between the property taxes on the

 5  homestead or the credit for rental of the homestead for the tax

 6  year and 3.5% of total household resources.

 7        (iv) For a claimant with total household resources of more

 8  than $23,000.00 and less than or equal to $24,000.00, an amount

 9  equal to 88% of the difference between the property taxes on the

10  homestead or the credit for rental of the homestead for the tax

11  year and 3.5% of total household resources.

12        (v) For a claimant with total household resources of more

13  than $24,000.00 and less than or equal to $25,000.00, an amount

14  equal to 84% of the difference between the property taxes on the

15  homestead or the credit for rental of the homestead for the tax

16  year and 3.5% of total household resources.

17        (vi) For a claimant with total household resources of more

18  than $25,000.00 and less than or equal to $26,000.00, an amount

19  equal to 80% of the difference between the property taxes on the

20  homestead or the credit for rental of the homestead for the tax

21  year and 3.5% of total household resources.

22        (vii) For a claimant with total household resources of more

23  than $26,000.00 and less than or equal to $27,000.00, an amount

24  equal to 76% of the difference between the property taxes on the

25  homestead or the credit for rental of the homestead for the tax

26  year and 3.5% of total household resources.

27        (viii) For a claimant with total household resources of more

 1  than $27,000.00 and less than or equal to $28,000.00, an amount

 2  equal to 72% of the difference between the property taxes on the

 3  homestead or the credit for rental of the homestead for the tax

 4  year and 3.5% of total household resources.

 5        (ix) For a claimant with total household resources of more

 6  than $28,000.00 and less than or equal to $29,000.00, an amount

 7  equal to 68% of the difference between the property taxes on the

 8  homestead or the credit for rental of the homestead for the tax

 9  year and 3.5% of total household resources.

10        (x) For a claimant with total household resources of more

11  than $29,000.00 and less than or equal to $30,000.00, an amount

12  equal to 64% of the difference between the property taxes on the

13  homestead or the credit for rental of the homestead for the tax

14  year and 3.5% of total household resources.

15        (xi) For a claimant with total household resources of more

16  than $30,000.00, an amount equal to 60% of the difference between

17  the property taxes on the homestead or the credit for rental of

18  the homestead for the tax year and 3.5% of total household

19  resources.

20        (c) A claimant who is a senior citizen with total household

21  resources of $21,000.00 or less or a paraplegic, hemiplegic, or

22  quadriplegic and for tax years that begin after December 31,

23  1999, a claimant who is totally and permanently disabled, deaf,

24  or, for tax years that begin after December 31, 2012, blind is

25  entitled to a credit against the state income tax liability for

26  the amount by which the property taxes on the homestead, the

27  credit for rental of the homestead, or a service charge in lieu

 1  of ad valorem taxes as provided by section 15a of the state

 2  housing development authority act of 1966, 1966 PA 346, MCL

 3  125.1415a, for the tax year exceeds the percentage of the

 4  claimant's total household resources for that tax year computed

 5  as follows:

6       For tax years ending before January 1, 2016             

7       Total household resources                      Percentage

8       Not over $3,000.00                                 .0%

9       Over $3,000.00 but not over $4,000.00             1.0%

10      Over $4,000.00 but not over $5,000.00             2.0%

11      Over $5,000.00 but not over $6,000.00             3.0%

12      Over $6,000.00                                    3.5%

13

14      For tax years beginning after December 31, 2015         

15      Total household resources                      Percentage

16      Not over $6,000.00                                 .0%

17      Over $6,000.00                                    3.5%

18        (d) A claimant who is an eligible serviceperson, eligible

19  veteran, or eligible widow or widower is entitled to a credit

20  against the state income tax liability for a percentage of the

21  property taxes on the homestead for the tax year not in excess of

22  100% determined as follows:

23        (i) Divide the taxable value allowance specified in section

24  506 by the taxable value of the homestead or, if the eligible

25  serviceperson, eligible veteran, or eligible widow or widower

26  leases or rents a homestead, divide 17% of the total annual rent

27  paid for tax years before the 1994 tax year, or 20% of the total

 1  annual rent paid for tax years after the 1993 tax year on the

 2  property by the property tax rate on the property.

 3        (ii) Multiply the property taxes on the homestead by the

 4  percentage computed in subparagraph (i).

 5        (e) A claimant who is blind is entitled to a credit against

 6  the state income tax liability for a percentage of the property

 7  taxes on the homestead for the tax year determined as follows:

 8        (i) If the taxable value of the homestead is $3,500.00 or

 9  less, 100% of the property taxes.

10        (ii) If the taxable value of the homestead is more than

11  $3,500.00, the percentage that $3,500.00 bears to the taxable

12  value of the homestead.

13        (2) A person who is qualified to make a claim under more

14  than 1 classification shall elect the classification under which

15  the claim is made.

16        (3) Only 1 claimant per household for a tax year is entitled

17  to the credit, unless both the husband and wife filing a joint

18  return are blind, then each shall be considered a claimant.

19        (4) As used in this section, "totally and permanently

20  disabled" means disability as defined in section 216 of title II

21  of the social security act, 42 USC 416.

22        (5) A senior citizen who has total household resources for

23  the tax year of $6,000.00 or less and who for 1973 received a

24  senior citizen homestead exemption under former section 7c of the

25  general property tax act, 1893 PA 206, may compute the credit

26  against the state income tax liability for a percentage of the

27  property taxes on the homestead for the tax year determined as

 1  follows:

 2        (a) If the taxable value of the homestead is $2,500.00 or

 3  less, 100% of the property taxes.

 4        (b) If the taxable value of the homestead is more than

 5  $2,500.00, the percentage that $2,500.00 bears to the taxable

 6  value of the homestead.

 7        (6) For a return of less than 12 months, the claim shall be

 8  reduced proportionately.

 9        (7) The department may prescribe tables that may be used to

10  determine the amount of the claim.

11        (8) The total credit allowed in this section for each year

12  after December 31, 1975 shall not exceed $1,200.00 per year.

13        (9) The total credit allowable under this part and part 361

14  of the natural resources and environmental protection act, 1994

15  PA 451, MCL 324.36101 to 324.36117, shall not exceed the total

16  property tax due and payable by the claimant in that year. The

17  amount by which the credit exceeds the property tax due and

18  payable shall be deducted from the credit claimed under part 361

19  of the natural resources and environmental protection act, 1994

20  PA 451, MCL 324.36101 to 324.36117.

21        Enacting section 1. This amendatory act does not take effect

22  unless Senate Joint Resolution ____ or House Joint Resolution

23  ____ (request no. 02708'13 **) of the 97th Legislature becomes a

24  part of the state constitution of 1963 as provided in section 1

25  of article XII of the state constitution of 1963.