SENATE BILL No. 1352
May 22, 2002, Introduced by Senators SCHWARZ, GAST and GOUGEON and referred to the
Committee on Finance.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending section 51 (MCL 206.51), as amended by 1999 PA 6; and
to repeal acts and parts of acts.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 51. (1) For receiving, earning, or otherwise acquiring
2 income from any source whatsoever, there is levied and imposed
3 upon the taxable income of every person other than a corporation
4 a tax at the following rates in the following circumstances:
5 (a) Before May 1, 1994, 4.6%.
6 (b) After April 30, 1994 and before January 1, 2000, 4.4%.
7 (c) For tax years that begin on and after January 1, 2000
8 and before January
1, 2002 and on and after
January 1, 2003, the
9 rate under section
51b, 51c, 51d, or 51e, as
applicable JANUARY
10 1, 2004, 4.2%.
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1 (d) For tax years that begin
on and after
January 1, 2002
2 2004 and before January 1,
2003 2005, 4.1%.
3 (E) FOR TAX YEARS THAT BEGIN ON AND AFTER JANUARY 1, 2005
4 AND BEFORE JANUARY 1, 2006, 4.0%.
5 (F) FOR TAX YEARS THAT BEGIN ON AND AFTER JANUARY 1, 2006,
6 3.9%.
7 (2) The following percentages of the net revenues collected
8 under this section
and sections 51b, 51c, 51d, and
51e shall be
9 deposited in the state school aid fund created in section 11 of
10 article IX of the state constitution of 1963:
11 (a) Beginning October 1, 1994 and before October 1, 1996,
12 14.4% of the gross collections before refunds from the tax levied
13 under this section.
14 (b) After September 30, 1996 and before January 1, 2000,
15 23.0% of the gross collections before refunds from the tax levied
16 under this section.
17 (c) Beginning January 1, 2000, that percentage of the gross
18 collections before refunds from the tax levied under this section
19 that is equal to 1.012% divided by the income tax rate levied
20 under this section.
or section 51b, 51c, 51d, or
51e, as
21 applicable.
22 (3) The department shall annualize rates provided in subsec-
23 tion (1) as necessary for tax years that end after April 30,
24 1994. The applicable annualized rate shall be imposed upon the
25 taxable income of every person other than a corporation for those
26 tax years.
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1 (4) The taxable income of a nonresident shall be computed in
2 the same manner that the taxable income of a resident is
3 computed, subject to the allocation and apportionment provisions
4 of this act.
5 (5) A resident beneficiary of a trust whose taxable income
6 includes all or part of an accumulation distribution by a trust,
7 as defined in section 665 of the internal revenue code, shall be
8 allowed a credit against the tax otherwise due under this act.
9 The credit shall be all or a proportionate part of any tax paid
10 by the trust under this act for any preceding taxable year that
11 would not have been payable if the trust had in fact made distri-
12 bution to its beneficiaries at the times and in the amounts spec-
13 ified in section 666 of the internal revenue code. The credit
14 shall not reduce the tax otherwise due from the beneficiary to an
15 amount less than would have been due if the accumulation distri-
16 bution were excluded from taxable income.
17 (6) The taxable income of a resident who is required to
18 include income from a trust in his or her federal income tax
19 return under the provisions of subpart E of part I of subchapter
20 J of chapter 1 of the internal revenue code, 26 U.S.C. 671 to
21 679, shall include items of income and deductions from the trust
22 in taxable income to the extent required by this act with respect
23 to property owned outright.
24 (7) It is the intention of this section that the income
25 subject to tax of every person other than corporations shall be
26 computed in like manner and be the same as provided in the
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1 internal revenue code subject to adjustments specifically
2 provided for in this act.
3 (8) As used in this section:
and sections
51b, 51c, 51d,
4 and 51e:
5 (a) "Person other than a corporation" means a resident or
6 nonresident individual or any of the following:
7 (i) A partner in a partnership as defined in the internal
8 revenue code.
9 (ii) A beneficiary of an estate or a trust as defined in the
10 internal revenue code.
11 (iii) An estate or trust as defined in the internal revenue
12 code.
13 (b) "Taxable income" means taxable income as defined in this
14 act subject to the applicable source and attribution rules con-
15 tained in this act.
16 Enacting section 1. Sections 51c, 51d, and 51e of the
17 income tax act of 1967, 1967 PA 281, MCL 206.51c, 206.51d, and
18 206.51e, are repealed effective January 1, 2002.
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