SB-1523, As Passed Senate, November 13, 2008
September 18, 2008, Introduced by Senators GILBERT and JANSEN and referred to the Committee on Finance.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 433 (MCL 208.1433), as amended by 2007 PA 215.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 433. (1) A taxpayer that is a business located and
conducting business activity within a renaissance zone may claim a
credit against the tax imposed by this act for the tax year to the
extent and for the duration provided pursuant to the Michigan
renaissance
zone act, 1996 PA 376, MCL 125.2681 to 125.2696, equal
to
the lesser of the following as
follows:
(a) Except as otherwise provided under subdivision (b), for a
taxpayer located and conducting business activity in a renaissance
zone after November 30, 2002, a credit equal to the lesser of the
following:
(i) (a) The tax liability attributable to business activity
conducted within a renaissance zone in the tax year.
(ii) (b)
Ten percent of adjusted services
performed in a
designated renaissance zone.
(b) (c)
For a taxpayer located and
conducting business
activity
in a renaissance zone before December 31 1, 2002, the or
for a taxpayer that entered into a purchase agreement or lease
agreement before December 1, 2002, for real or personal property
that is to be used for business activity in a renaissance zone, a
credit equal to the greater of the following:
(i) The amount calculated under subdivision (a)(i) or (ii),
whichever is less.
(ii) The product of the following:
(A) (i) The
credit claimed under section 39b of former 1975 PA
228 for the tax year ending in 2007.
(B) (ii) The
ratio of the taxpayer's payroll in this state in
the tax year divided by the taxpayer's payroll in this state in its
tax year ending in 2007 under former 1975 PA 228.
(C) (iii) The
ratio of the taxpayer's renaissance zone business
activity factor for the tax year divided by the taxpayer's
renaissance zone business activity factor for its tax year ending
in 2007 under section 39b of former 1975 PA 228.
(2) Any portion of the taxpayer's tax liability that is
attributable to illegal activity conducted in the renaissance zone
shall not be used to calculate a credit under this section.
(3) The credit allowed under this section continues through
the tax year in which the renaissance zone designation expires.
(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 not be
refunded.
(5) A taxpayer that claims a credit under this section shall
not employ, pay a speaker fee to, or provide any remuneration,
compensation, or consideration to any person employed by the state,
the state administrative board created in 1921 PA 2, MCL 17.1 to
17.3, or the renaissance zone review board created in section 5 of
the
renaissance zone act, 1996 PA 376, MCL 125.2681
to 125.2696
125.2685, whose employment relates or related in any way to the
authorization or enforcement of the credit allowed under this
section for any year in which the taxpayer claims a credit under
this section and for the 3 years after the last year that a credit
is claimed.
(6) To be eligible for the credit allowed under this section,
an otherwise qualified taxpayer shall file an annual return under
this act in a format determined by the department.
(7) Any portion of the taxpayer's tax liability that is
attributable to business activity related to the operation of a
casino, and business activity that is associated or affiliated with
the operation of a casino, including, but not limited to, the
operation of a parking lot, hotel, motel, or retail store, shall
not be used to calculate a credit under this section.
(8) For purposes of this section, taxpayer includes a person
subject to the tax imposed under chapters 2A and 2B.
(9) As used in this section:
(a) "Adjusted services performed in a designated renaissance
zone" means either of the following:
(i) Except as provided in subparagraph (ii), the sum of the
taxpayer's payroll for services performed in a designated
renaissance zone plus an amount equal to the amount deducted in
arriving at federal taxable income for the tax year for
depreciation, amortization, or immediate or accelerated write-off
for tangible property exempt under section 7ff of the general
property tax act, 1893 PA 206, MCL 211.7ff, in the tax year or, for
new property, in the immediately following tax year.
(ii) For a partnership, limited liability company, S
corporation, or individual, the amount determined under
subparagraph (i) plus the product of the following as related to the
taxpayer if greater than zero:
(A) Business income.
(B) The ratio of the taxpayer's total sales in this state
during the tax year divided by the taxpayer's total sales
everywhere during the tax year.
(C) The renaissance zone business activity factor.
(b) "Casino" means a casino regulated by this state pursuant
to the Michigan gaming control and revenue act, 1996 IL 1, MCL
432.201 to 432.226.
(c) "New property" means property that has not been subject
to, or exempt from, the collection of taxes under the general
property
tax act, 1893 PA 206, MCL 211.1 to 211.157 211.155,
and
has not been subject to, or exempt from, ad valorem property taxes
levied in another state, except that receiving an exemption as
inventory property does not disqualify property.
(d) "Payroll" means total salaries and wages before deducting
any personal or dependency exemptions.
(e) "Renaissance zone" means that term as defined in the
Michigan renaissance zone act, 1996 PA 376, MCL 125.2681 to
125.2696.
(f) "Renaissance zone business activity factor" means a
fraction, the numerator of which is the ratio of the average value
of the taxpayer's property located in a designated renaissance zone
to the average value of the taxpayer's property in this state plus
the ratio of the taxpayer's payroll for services performed in a
designated renaissance zone to all of the taxpayer's payroll in
this state and the denominator of which is 2.
(g) "Tax liability attributable to business activity conducted
within a renaissance zone" means the taxpayer's tax liability
multiplied by the renaissance zone business activity factor.