February 13, 2014, Introduced by Reps. Irwin, LaVoy, Schor, Lamonte, Zemke, Kandrevas, Driskell, Howrylak, Tlaib, Roberts, Yanez, Barnett, Hovey-Wright, Durhal and Oakes and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.713) by adding sections 260, 261, and 269.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 260. (1) For tax years that begin after December 31,
2013, a taxpayer may credit against the tax imposed by this act for
the tax year, an amount, subject to the applicable limitations
provided by this section, equal to 50% of the aggregate amount of
charitable contributions made by the taxpayer during the tax year
to any of the following:
(a) This state pursuant to the Faxon-McNamee art in public
places act, 1980 PA 105, MCL 18.71 to 18.81, of an artwork created
by the taxpayer, for display in a public place.
(b) The state art in public places fund created pursuant to
the Faxon-McNamee art in public places act, 1980 PA 105, MCL 18.71
to 18.81.
(c) A municipality in this state of an artwork created by the
personal effort of the taxpayer for display in a public place.
(d) Either a municipality of this state or a nonprofit
corporation affiliated with both a municipality and an art
institute located in the municipality, of money or artwork, whether
or not created by the personal effort of the taxpayer, if for the
purpose of benefiting an art institute located in that
municipality.
(e) A public library.
(f) A public broadcast station as defined by section 397 of
subpart e of part IV of title III of the communications act of
1934, 47 USC 397, that is not affiliated with an institution of
higher education and that is located within this state.
(g) An institution of higher learning located within this
state.
(h) The Michigan colleges foundation.
(i) The state museum.
(j) The department of state for the purpose of preservation of
the state archives.
(k) A nonprofit corporation, fund, foundation, trust, or
association organized and operated exclusively for the benefit of
institutions of higher learning located within this state. A tax
credit for a contribution described in this subdivision is
permitted only if the donee corporation, fund, foundation, trust,
or association is controlled or approved and reviewed by the
governing board of the institution benefiting from the charitable
contribution. The nonprofit corporation, fund, foundation, trust,
or association shall provide copies of its annual independently
audited financial statements to the auditor general of this state
and chairpersons of the senate and house appropriations committees.
(2) For a taxpayer other than a resident estate or trust, the
amount allowable as a credit under this section for a tax year
shall not exceed $100.00, or for a joint return as provided in
section 311, $200.00.
(3) For a resident estate or trust, the amount allowable as a
credit under this section for a tax year shall not exceed 10% of
the tax liability for the year as determined without regard to this
section or $5,000.00, whichever is less and shall not have been
deducted in arriving at federal taxable income.
(4) As used in this section:
(a) "Institution of higher learning" means only an educational
institution located within this state that meets all of the
following requirements:
(i) It maintains a regular faculty and curriculum and has a
regularly enrolled body of students in attendance at the place
where its educational activities are carried on.
(ii) It regularly offers education above the twelfth grade.
(iii) It awards associate, bachelors, masters, or doctoral
degrees or a combination of those degrees or higher education
credits acceptable for those degrees granted by other institutions
of higher learning.
(iv) It is recognized by the state board of education as an
institution of higher learning and appears as an institution of
higher learning in the annual publication of the department of
education entitled "The Directory of Institutions of Higher
Education".
(b) "Public library" means that term as defined in section 2
of the state aid to public libraries act, 1977 PA 89, MCL 397.552.
(c) "Contributions made by the taxpayer" means, but is not
limited to, the fair market value of artwork created by the
personal effort of the taxpayer that is donated to and accepted as
a donation by a qualified organization. The fair market value of a
piece of artwork shall be determined at the time of the donation by
independent appraisal.
(d) "Artwork" means an original, visual creation of quality
executed in any size or shape, in any media, using any kind or type
of materials.
Sec. 261. (1) For tax years that begin after December 31, 2013
and subject to the applicable limitations in this section, a
taxpayer may credit against the tax imposed by this act 50% of the
sum of the cash amount and, if food items are contributed in
conjunction with a program in which a vendor makes a matching
contribution of similar items, the value of those food items the
taxpayer contributes during the tax year to a shelter for homeless
persons, food kitchen, food bank, or other entity located in this
state, the primary purpose of which is to provide overnight
accommodation, food, or meals to persons who are indigent if a
contribution to that entity is tax deductible for the donor under
the internal revenue code.
(2) For a taxpayer other than a resident estate or trust, the
credit allowed by this section for a contribution to a community
foundation shall not exceed $100.00, or $200.00 for a joint return.
A taxpayer may claim an additional credit under this section not to
exceed $100.00, or $200.00 for a joint return, for total cash
contributions made, including the value of food items contributed
as described in subsection (1) in the tax year to shelters for
homeless persons, food kitchens, food banks, and, except for
community foundations, other entities allowed under subsection (1).
A resident estate or trust may claim a credit under this section
not to exceed 10% of the taxpayer's tax liability for the tax year
before claiming any credits allowed by this act or $5,000.00,
whichever is less, for total cash contributions made, including the
value of food items contributed as described in subsection (1) in
the tax year to shelters for homeless persons, food kitchens, food
banks, and, except for community foundations, other entities
allowed under subsection (1). For a resident estate or trust, the
amount used to calculate the credits under this section shall not
have been deducted in arriving at federal taxable income.
(3) Subject to the applicable limitations in this section,
when calculating the amount of the credit allowed under this
section a taxpayer may include as a cash contribution an amount
equal to the value of food items contributed as described in
subsection (1) in the tax year to a shelter for homeless persons,
food kitchen, food bank, or other entity located in this state as
described in subsection (1).
(4) The credits allowed under this section are nonrefundable
so that a taxpayer shall not claim under this section a total
credit amount that reduces the taxpayer's tax liability to less
than zero.
(5) As used in this section, "community foundation" means an
organization that applies for certification on or before May 15 of
the tax year for which the taxpayer is claiming the credit and that
the department certifies for that tax year as meeting all of the
following requirements:
(a) Qualifies for exemption from federal income taxation under
section 501(c)(3) of the internal revenue code.
(b) Supports a broad range of charitable activities within the
specific geographic area of this state that it serves, such as a
municipality or county.
(c) Maintains an ongoing program to attract new endowment
funds by seeking gifts and bequests from a wide range of potential
donors in the community or area served.
(d) Is publicly supported as defined by the regulations of the
United States department of treasury, 26 CFR 1.170A-9(e)(10). To
maintain certification, the community foundation shall submit
documentation to the department annually that demonstrates
compliance with this subdivision.
(e) Is not a supporting organization as an organization is
described in section 509(a)(3) of the internal revenue code and the
regulations of the United States department of treasury, 26 CFR
1.509(a)-4 and 1.509(a)-5.
(f) Meets the requirements for treatment as a single entity
contained in the regulations of the United States department of
treasury, 26 CFR 1.170A-9(e)(11).
(g) Except as provided in subsection (7), is incorporated or
established as a trust at least 6 months before the beginning of
the tax year for which the credit under this section is claimed and
that has an endowment value of at least $100,000.00 before the
expiration of 18 months after the community foundation is
incorporated or established.
(h) Has an independent governing body representing the general
public's interest and that is not appointed by a single outside
entity.
(i) Provides evidence to the department that the community
foundation has, before the expiration of 6 months after the
community foundation is incorporated or established, and maintains
continually during the tax year for which the credit under this
section is claimed, at least 1 part-time or full-time employee.
(j) For community foundations that have an endowment value of
$1,000,000.00 or more only, the community foundation is subject to
an annual independent financial audit and provides copies of that
audit to the department not more than 3 months after the completion
of the audit. For community foundations that have an endowment
value of less than $1,000,000.00, the community foundation is
subject to an annual review and an audit every third year.
(k) In addition to all other criteria listed in this
subsection for a community foundation that is incorporated or
established after June 22, 2000, operates in a county of this state
that was not served by a community foundation when the community
foundation was incorporated or established or operates as a
geographic component of an existing certified community foundation.
(6) An entity other than a community foundation may request
that the department determine if a contribution to that entity
qualifies for the credit under this section. The department shall
make a determination and respond to a request no later than 30 days
after the department receives the request.
(7) A taxpayer may claim a credit under this section for
contributions to a community foundation made before the expiration
of the 18-month period after a community foundation was
incorporated or established during which the community foundation
must build an endowment value of $100,000.00 as provided in
subsection (5)(g). If the community foundation does not reach the
required $100,000.00 endowment value during that 18-month period,
contributions to the community foundation made after the date on
which the 18-month period expires shall not be used to calculate a
credit under this section. At any time after the expiration of the
18-month period under subsection (5)(g) that the community
foundation has an endowment value of $100,000.00, the community
foundation may apply to the department for certification under this
section.
(8) On or before July 1 of each year, the department shall
report to the house committee on tax policy and the senate finance
committee the total amount of tax credits claimed under this
section for the immediately preceding tax year.
Sec. 269. (1) For tax years that begin after December 31,
2013, a taxpayer may claim a credit against the tax imposed by this
act, subject to the applicable limitations provided by this
section, in an amount equal to 50% of the fair market value of an
automobile donated by the taxpayer to a qualified organization that
intends to provide the automobile to a qualified recipient.
(2) The value of a passenger vehicle shall be determined by
the qualified organization or by using the value of the automobile
in the appropriate guide published by the national automotive
dealers association, whichever is less.
(3) For a taxpayer other than a resident estate or trust, the
amount allowable as a credit under this section for a tax year
shall not exceed $50.00, or for a joint return as provided in
section 311, $100.00.
(4) If the credit allowed under this section exceeds the tax
liability of the taxpayer for the tax year, that amount that
exceeds the tax liability shall not be refunded.
(5) As used in this section, "qualified organization" and
"qualified recipient" mean those terms as defined in section 4y of
the use tax act, 1937 PA 94, MCL 205.94y.