May 16, 2018, Introduced by Senators STAMAS, HORN, SHIRKEY and MACGREGOR and referred to the Committee on Michigan Competitiveness.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending section 635 (MCL 206.635), as amended by 2018 PA 31.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 635. (1) Except as otherwise provided under subsection
(4) or (6), each insurance company shall pay a tax determined under
this chapter.
(2)
The Except as otherwise
provided under this subsection,
the tax imposed by this chapter on each insurance company shall be
a tax equal to 1.25% of gross direct premiums written on property
or risk located or residing in this state. Beginning January 1,
2019, the tax imposed by this chapter on each insurance company
that offers a health insurance policy as defined under section 608
of the insurance code of 1956, 1956 PA 218, MCL 500.608, shall be a
tax equal to 1.05% of gross direct premiums written on health
insurance provided under a health insurance policy for risk located
or residing in this state and 1.25% of gross direct premiums
written on any other property or risk located or residing in this
state. Direct premiums do not include any of the following:
(a) Premiums on policies not taken.
(b) Returned premiums on canceled policies.
(c) Receipts from the sale of annuities.
(d) Receipts on reinsurance premiums if the tax has been paid
on the original premiums.
(e) The first $190,000,000.00 of disability insurance premiums
written in this state, other than credit insurance and disability
income insurance premiums, of each insurance company subject to tax
under this chapter. This exemption shall be reduced by $2.00 for
each $1.00 by which the insurance company's gross direct premiums
from insurance carrier services in this state and outside this
state exceed $280,000,000.00.
(3) The tax calculated under this chapter is in lieu of all
other privilege or franchise fees or taxes imposed by this part or
any other law of this state, except taxes on real and personal
property, taxes collected under the general sales tax act, 1933 PA
167, MCL 205.51 to 205.78, and taxes collected under the use tax
act, 1937 PA 94, MCL 205.91 to 205.111, and except as otherwise
provided in the insurance code of 1956, 1956 PA 218, MCL 500.100 to
500.8302.
(4) The tax imposed and levied under this chapter does not
apply to an insurance company authorized under chapter 46 or 47 of
the insurance code of 1956, 1956 PA 218, MCL 500.4601 to 500.4673
and 500.4701 to 500.4747.
(5) For a taxpayer subject to the tax imposed under chapter
11, that portion of the tax base attributable to the services
provided by an attorney-in-fact to a reciprocal insurer pursuant to
chapter 72 of the insurance code of 1956, 1956 PA 218, MCL 500.7200
to 500.7234, is exempt from the tax imposed by that chapter.
(6) The tax imposed and levied under this chapter does not
apply to a health maintenance organization authorized under chapter
35 of the insurance code of 1956, 1956 PA 218, MCL 500.3501 to
500.3573.