October 18, 2007, Introduced by Reps. Bieda, Angerer, Calley and Condino and referred to the Committee on Tax Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 403 (MCL 208.1403).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 403. (1) Notwithstanding any other provision in this act,
the credits provided in this section shall be taken before any
other credit under this act. The total combined credit allowed
under this section shall not exceed 65% of the total tax liability
imposed under this act.
(2) Subject to the limitation in subsection (1), a taxpayer
may claim a credit against the tax imposed by this act equal to
0.370% of the taxpayer's compensation in this state. For purposes
of
this subsection, a taxpayer includes a person described in
section
239(2) and subject to the tax
imposed under chapter 2A. A
professional employer organization shall not include payments by
the professional employer organization to the officers and
employees of a client of the professional employer organization
whose employment operations are managed by the professional
employer organization. A client may include payments by the
professional employer organization to the officers and employees of
the client whose employment operations are managed by the
professional employer organization.
(3) Subject to the limitation in subsection (1), a taxpayer
may claim a credit against the tax imposed by this act equal to
2.9% multiplied by the result of subtracting the sum of the amounts
calculated under subdivisions (d), (e), and (f) from the sum of the
amounts calculated under subdivisions (a), (b), and (c):
(a) Calculate the cost, including fabrication and
installation, paid or accrued in the taxable year of tangible
assets of a type that are, or under the internal revenue code will
become, eligible for depreciation, amortization, or accelerated
capital cost recovery for federal income tax purposes, provided
that the assets are physically located in this state for use in a
business activity in this state and are not mobile tangible assets.
(b) Calculate the cost, including fabrication and
installation, paid or accrued in the taxable year of mobile
tangible assets of a type that are, or under the internal revenue
code will become, eligible for depreciation, amortization, or
accelerated capital cost recovery for federal income tax purposes.
This amount shall be multiplied by the apportionment factor for the
tax year as prescribed in chapter 3.
(c) For tangible assets, other than mobile tangible assets,
purchased or acquired for use outside of this state in a tax year
beginning after December 31, 2007 and subsequently transferred into
this state and purchased or acquired for use in a business
activity, calculate the federal basis used for determining gain or
loss as of the date the tangible assets were physically located in
this state for use in a business activity plus the cost of
fabrication and installation of the tangible assets in this state.
(d) If the cost of tangible assets described in subdivision
(a) was paid or accrued in a tax year beginning after December 31,
2007, or before December 31, 2007 to the extent the credit is used
and at the rate at which the credit was used under former 1975 PA
228 or this act, calculate the gross proceeds or benefit derived
from the sale or other disposition of the tangible assets minus the
gain, multiplied by the apportionment factor for the taxable year
as prescribed in chapter 3, and plus the loss, multiplied by the
apportionment factor for the taxable year as prescribed in chapter
3 from the sale or other disposition reflected in federal taxable
income and minus the gain from the sale or other disposition added
to the business income tax base in section 201.
(e) If the cost of tangible assets described in subdivision
(b) was paid or accrued in a tax year beginning after December 31,
2007, or before December 31, 2007 to the extent the credit is used
and at the rate at which the credit was used under former 1975 PA
228 or this act, calculate the gross proceeds or benefit derived
from the sale or other disposition of the tangible assets minus the
gain and plus the loss from the sale or other disposition reflected
in federal taxable income and minus the gain from the sale or other
disposition added to the business income tax base in section 201.
This amount shall be multiplied by the apportionment factor for the
tax year as prescribed in chapter 3.
(f) For assets purchased or acquired in a tax year beginning
after December 31, 2007, or before December 31, 2007 to the extent
the credit is used and at the rate at which the credit was used
under former 1975 PA 228 or this act, that were eligible for a
credit under subdivision (a) or (c) and that were transferred out
of this state, calculate the federal basis used for determining
gain or loss as of the date of the transfer.
(4) For a tax year in which the amount of the credit
calculated under subsection (3) is negative, the absolute value of
that amount is added to the taxpayer's tax liability for the tax
year.
(5) A taxpayer that claims a credit under this section is not
prohibited from claiming a credit under section 405. However, the
taxpayer shall not claim a credit under this section and section
405 based on the same costs and expenses.
Enacting section 1. This amendatory act takes effect January
1, 2008.