HOUSE BILL No. 6178

 

June 8, 2006, Introduced by Reps. Amos, Tobocman, Proos, Donigan, Byrnes, Clemente, Mayes, Kolb, Lipsey, Kahn, Murphy, Alma Smith, Kathleen Law, Accavitti, David Law, Ball, Palmer, Espinoza, McDowell, Polidori, Cushingberry, Sak, Anderson, Stewart, Kooiman and Gaffney and referred to the Committee on Commerce.

 

     A bill to amend 1975 PA 228, entitled

 

"Single business tax act,"

 

(MCL 208.1 to 208.145) by adding sections 36f, 36g, and 36h.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 36f. (1) For tax years that begin after December 31,

 

2005, a taxpayer may claim a credit against the tax imposed by this

 

act equal to the amount determined by the cultural redevelopment

 

district authority for projects located in a cultural redevelopment

 

district that have been approved by the cultural redevelopment

 

authority board that are part of the application submitted by a

 

qualified local governmental unit in which the project will be

 

developed.

 

     (2) A taxpayer shall apply to the cultural redevelopment


 

authority board for approval of a project under this section. The

 

cultural redevelopment authority board is authorized to approve or

 

deny an application. A project shall be approved or denied not more

 

than 45 days after receipt of the application. If the cultural

 

redevelopment authority board does not approve or deny an

 

application within 45 days after the application is received by the

 

cultural redevelopment authority board, the application is

 

considered approved as written. If the cultural redevelopment

 

authority board approves a project, the cultural redevelopment

 

authority board shall issue an approval letter that states that the

 

taxpayer qualifies for the credit under this section and the amount

 

of the credit that the taxpayer may claim for the project. If an

 

application is denied, a taxpayer is not prohibited from

 

subsequently applying for the same project or for another project.

 

A taxpayer and assignees under subsection (5) that claim a credit

 

under this section shall attach a copy of the approval letter to

 

the annual return filed under this act on which the credit is

 

claimed.

 

     (3) The total of all credits for all projects approved under

 

this section shall not exceed $1,000,000.00 in any calendar year.

 

     (4) The credit for each project approved under this section

 

shall not exceed $250,000.00.

 

     (5) A taxpayer may assign all or a portion of a credit allowed

 

under this section. A credit assignment under this subsection is

 

irrevocable and shall be made in the tax year in which the project

 

is completed. A taxpayer may claim a portion of a credit and assign

 

the remaining credit amount. If the taxpayer both claims and


 

assigns portions of the credit, the taxpayer shall claim the

 

portion it claims in the tax year in which the project is

 

completed. An assignee may subsequently assign a credit or any

 

portion of a credit assigned under this section to 1 or more

 

assignees. The credit assignment or a subsequent reassignment under

 

this section shall be made on a form prescribed by the cultural

 

redevelopment district authority. The taxpayer shall send a copy of

 

the completed assignment form to the cultural redevelopment

 

district authority in the tax year in which an assignment or

 

reassignment is made. An assignee or subsequent reassignee shall

 

attach a copy of the completed assignment form to its annual return

 

required under this act, for the tax year in which the assignment

 

or reassignment is made and the assignee or reassignee first claims

 

a credit, which shall be the same tax year.

 

     (6) If the credit allowed under this section for the tax year

 

and any unused carryforward of the credit allowed under this

 

section exceed the tax liability of the taxpayer for the tax year,

 

the excess shall not be refunded, but may be carried forward as an

 

offset to the tax liability in subsequent tax years for 10 tax

 

years or until the excess credit is used up, whichever occurs

 

first.

 

     (7) As used in this section:

 

     (a) "Artist", "artistic work", "cultural redevelopment

 

district authority", "cultural redevelopment district authority

 

board", "cultural redevelopment district", and "qualified local

 

governmental unit" mean those terms as defined in the cultural

 

redevelopment district authority act.


 

     (b) "Project" means any development project within the

 

cultural redevelopment district.

 

     Sec. 36g. (1) For tax years that begin after December 31,

 

2005, a taxpayer may claim a credit against the tax imposed by this

 

act equal to the sum of the following:

 

     (a) The amount of property taxes levied against the taxpayer's

 

property that is rented to a person who is an artist and who lives

 

in the property or that is used to create, sell, or display

 

artistic work multiplied first by the percentage in subparagraph (i)

 

and then multiplied by the fraction determined under subparagraph

 

(ii):

 

     (i) The percentage of the total area of the taxpayer's property

 

that is rented to the artist.

 

     (ii) A fraction, the numerator of which is the number of days

 

during the tax year that the taxpayer's property is rented to an

 

artist and the denominator of which is 365.

 

     (b) The amount of property taxes levied against the taxpayer's

 

property that is lived in by the taxpayer who is an artist and is

 

used by the taxpayer to create or is used to display artistic work

 

multiplied first by the percentage in subparagraph (i) and then

 

multiplied by the fraction determined under subparagraph (ii):

 

     (i) The percentage of the total area of the taxpayer's property

 

that is lived in by the taxpayer who is an artist and is used by

 

the taxpayer to create or display artistic work.

 

     (ii) A fraction, the numerator of which is the number of days

 

during the tax year that the taxpayer's property is rented to an

 

artist and the denominator of which is 365.


 

     (2) A taxpayer may claim the credit under subsection (1)(a) if

 

all of the following apply:

 

     (a) The artist creates artistic work while residing at the

 

taxpayer's property.

 

     (b) The taxpayer's property is located in a cultural

 

redevelopment district in this state.

 

     (c) The taxpayer has applied to the cultural redevelopment

 

district authority for the cultural redevelopment district in which

 

the property is located and the authority certifies that the

 

taxpayer is eligible.

 

     (3) The credit is equal to the following percentage of the

 

total amount determined under subsection (1):

 

     (a) Eighty percent for the first 5 tax years.

 

     (b) Seventy percent for the sixth tax year.

 

     (c) Sixty percent for the seventh tax year.

 

     (d) Fifty percent for the eighth tax year.

 

     (e) Forty percent for the ninth tax year.

 

     (f) Thirty percent for the tenth tax year.

 

     (g) Zero percent for each year after the tenth tax year.

 

     (4) If the taxpayer's property contains multiple units, the

 

credit shall be prorated to include only that portion of the

 

property taxes attributable to the units or portions of units

 

rented to 1 or more artists or used to create or display artistic

 

work.

 

     (5) A taxpayer may assign all or a portion of a credit allowed

 

under this section. A credit assignment under this subsection is

 

irrevocable and shall be made in the tax year in which the project


 

is completed. A taxpayer may claim a portion of a credit and assign

 

the remaining credit amount. If the taxpayer both claims and

 

assigns portions of the credit, the taxpayer shall claim the

 

portion it claims in the tax year in which the project is

 

completed. An assignee may subsequently assign a credit or any

 

portion of a credit assigned under this section to 1 or more

 

assignees. The credit assignment or a subsequent reassignment under

 

this section shall be made on a form prescribed by the cultural

 

redevelopment district authority. The taxpayer shall send a copy of

 

the completed assignment form to the cultural redevelopment

 

district authority in the tax year in which an assignment or

 

reassignment is made. An assignee or subsequent reassignee shall

 

attach a copy of the completed assignment form to its annual return

 

required under this act, for the tax year in which the assignment

 

or reassignment is made and the assignee or reassignee first claims

 

a credit, which shall be the same tax year.

 

     (6) If the credit allowed under this section for the tax year

 

and any unused carryforward of the credit allowed by this section

 

exceed the taxpayer's tax liability for the tax year, that portion

 

that exceeds the tax liability for the tax year shall not be

 

refunded but may be carried forward to offset tax liability in

 

subsequent years for 10 years or until used up, whichever occurs

 

first.

 

     (7) As used in this section and section 36h:

 

     (a) "Artist" and "artistic work" mean those terms as defined

 

in the cultural redevelopment district authority act.

 

     (b) "Authority" or "cultural redevelopment district authority"


 

means an authority created in the cultural redevelopment district

 

authority act.

 

     (c) "Cultural redevelopment district" means a district as that

 

term is defined in the cultural redevelopment district authority

 

act.

 

     (d) "Property taxes" means that term as defined in section 512

 

of the income tax act of 1967, 1967 PA 281, MCL 206.512.

 

     Sec. 36h. (1) For tax years that begin after December 31,

 

2005, a taxpayer may claim a credit against the tax imposed by this

 

act equal to the contributions made in the tax year to a qualified

 

nonprofit organization located within or conducting business in a

 

cultural redevelopment district.

 

     (2) A credit under this section shall not exceed $5,000.00 or

 

5% of the taxpayer's tax liability for the tax year, whichever is

 

less.

 

     (3) A contribution used to calculate a credit under this

 

section shall not be used to calculate a credit under any other

 

section of this act or under the income tax act of 1967, 1967 PA

 

281, MCL 206.1 to 206.532.

 

     (4) If the amount of the 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 shall be

 

refunded.

 

     (5) As used in this section, "qualified nonprofit

 

organization" means an entity that is exempt from taxation under

 

section 501(c)(3) of the internal revenue code and the primary

 

purpose of which is to promote the creation, distribution, and


 

marketing of artistic works or arts education.