April 16, 2013, Introduced by Reps. Lamonte, Darany, Slavens, Brinks, Hovey-Wright, Barnett, Geiss, Yanez, Kandrevas, Schor, Knezek, LaVoy, Dillon, Tlaib, Switalski, Faris, Cochran, Smiley, Stanley, McCann, Brunner, Brown, Kosowski, Lane, Ananich, Haugh, Abed, Driskell, Robinson, Cavanagh, Roberts, Greimel, Lipton, Segal and Dianda and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending sections 520 and 522 (MCL 206.520 and 206.522),
section 520 as amended by 2011 PA 273 and section 522 as amended
by 2011 PA 180.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 520. (1) Subject to the limitations and the definitions
2 in this chapter, a claimant may claim against the tax due under
3 this part for the tax year a credit for the property taxes on the
4 taxpayer's homestead deductible for federal income tax purposes
5 pursuant to section 164 of the internal revenue code, or that
6 would have been deductible if the claimant had not elected the
7 zero bracket amount or if the claimant had been subject to the
8 federal income tax. The property taxes used for the credit
9 computation shall not be greater than the amount levied for 1 tax
1 year. An owner is not eligible for a credit under this section if
2 the taxable value of his or her homestead excluding the portion
3 of a parcel of real property that is unoccupied and classified as
4 agricultural for ad valorem tax purposes in the year for which
5 the credit is claimed is greater than $135,000.00. As used in
6 this subsection, "taxable value" means that value determined
7 under section 27a of the general property tax act, 1893 PA 206,
8 MCL 211.27a.
9 (2) A person who rents or leases a homestead may claim a
10 similar credit computed under this section and section 522 based
11 upon 17% of the gross rent paid for tax years before the 1994 tax
12 year, or 20% of the gross rent paid for tax years after the 1993
13 tax year. A person who rents or leases a homestead subject to a
14 service charge in lieu of ad valorem taxes as provided by section
15 15a of the state housing development authority act of 1966, 1966
16 PA 346, MCL 125.1415a, may claim a similar credit computed under
17 this section and section 522 based upon 10% of the gross rent
18 paid.
19 (3) If the credit claimed under this section and section 522
20 exceeds the tax liability for the tax year or if there is no tax
21 liability for the tax year, the amount of the claim not used as
22 an offset against the tax liability shall, after examination and
23 review, be approved for payment, without interest, to the
24 claimant. In determining the amount of the payment under this
25 subsection, withholdings and other credits shall be used first to
26 offset any tax liabilities.
27 (4) If the homestead is an integral part of a multipurpose
1 or multidwelling building that is federally aided housing or
2 state aided housing, a claimant who is a senior citizen entitled
3 to a payment under subsection (2) may assign the right to that
4 payment to a mortgagor if the mortgagor reduces the rent charged
5 and collected on the claimant's homestead in an amount equal to
6 the tax credit payment provided in this chapter. The assignment
7 of the claim is valid only if the Michigan state housing
8 development authority, by affidavit, verifies that the claimant's
9 rent has been so reduced.
10 (5) Only the renter or lessee shall claim a credit on
11 property that is rented or leased as a homestead.
12 (6) A person who discriminates in the charging or collection
13 of rent on a homestead by increasing the rent charged or
14 collected because the renter or lessee claims and receives a
15 credit or payment under this chapter is guilty of a misdemeanor.
16 Discrimination against a renter who claims and receives the
17 credit under this section and section 522 by a reduction of the
18 rent on the homestead of a person who does not claim and receive
19 the credit is a misdemeanor. If discriminatory rents are charged
20 or collected, each charge or collection of the higher or lower
21 payment is a separate offense. Each acceptance of a payment of
22 rent is a separate offense.
23 (7) A person who received aid to families with dependent
24 children, state family assistance, or state disability assistance
25 pursuant to the social welfare act, 1939 PA 280, MCL 400.1 to
26 400.119b, in the tax year for which the person is filing a return
27 shall have a credit that is authorized and computed under this
1 section and section 522 reduced by an amount equal to the product
2 of the claimant's credit multiplied by the quotient of the sum of
3 the claimant's aid to families with dependent children, state
4 family assistance, and state disability assistance for the tax
5 year divided by the claimant's total household resources. The
6 reduction of credit shall not exceed the sum of the aid to
7 families with dependent children, state family assistance, and
8 state disability assistance for the tax year. For the purposes of
9 this subsection, aid to families with dependent children does not
10 include child support payments that offset or reduce payments
11 made to the claimant.
12 (8) A credit under subsection (1) or (2) shall be reduced by
13 10% for each claimant whose total household resources exceed
14 $41,000.00 $73,650.00
and by an additional 10% for each
increment
15 of $1,000.00 of total household resources in excess of
16 $41,000.00.$73,650.00.
17 (9) If the credit authorized and calculated under this
18 section and section 522 and adjusted under subsection (7) or (8)
19 does not provide to a senior citizen who rents or leases a
20 homestead that amount attributable to rent that constitutes more
21 than 40% of the total household resources of the senior citizen,
22 the senior citizen may claim a credit based upon the amount of
23 total household resources attributable to rent as provided by
24 this section.
25 (10) A senior citizen whose gross rent paid for the tax year
26 is more than the percentage of total household resources
27 specified in subsection (9) for the respective tax year may claim
1 a credit for the amount of rent paid that constitutes more than
2 the percentage of the total household resources of the senior
3 citizen specified in subsection (9) and that was not provided to
4 the senior citizen by the credit computed pursuant to this
5 section and section 522 and adjusted pursuant to subsection (7)
6 or (8).
7 (11) The department may promulgate rules to implement
8 subsections (9) to (15) and may prescribe a table to allow a
9 claimant to determine the credit provided under this section and
10 section 522 in the instruction booklet that accompanies the
11 respective income tax or property tax credit forms used by
12 claimants.
13 (12) A senior citizen may claim the credit under subsections
14 (9) to (15) on the same form as the property tax credit permitted
15 by subsection (2). The department shall adjust the forms
16 accordingly.
17 (13) A senior citizen who moves to a different rented or
18 leased homestead shall determine, for 2 tax years after the move,
19 both his or her qualification to claim a credit under subsections
20 (9) to (15) and the amount of a credit under subsections (9) to
21 (15) on the basis of the annualized final monthly rental payment
22 at his or her previous homestead, if this annualized rental is
23 less than the senior citizen's actual annual rental payments.
24 (14) For a return of less than 12 months, the claim for a
25 credit under subsections (9) to (15) shall be reduced
26 proportionately.
27 (15) The total credit allowed by this section and section
1 522 shall not exceed $1,200.00 per year.
2 Sec. 522. (1) The amount of a claim made pursuant to this
3 chapter shall be determined as follows:
4 (a) A claimant who is not a senior citizen is entitled to
a
5 credit against the state income tax liability under this part
6 equal to 60% of the amount by which the property taxes on the
7 homestead, or the credit for rental of the homestead for the tax
8 year, exceeds 3.5% of the claimant's total household resources
9 for that tax year.
10 (b) A claimant who is a senior citizen is entitled to a
11 credit against the state income tax liability under this part
12 equal to the following:
13 (i) For a
claimant with total household resources of
14 $21,000.00 or less, an amount as determined in accordance with
15 subdivision (c).
16 (ii) For
a claimant with total household resources of more
17 than $21,000.00 and less than or equal to $22,000.00, an amount
18 equal to 96% of the difference between the property taxes on the
19 homestead or the credit for rental of the homestead for the tax
20 year and 3.5% of total household resources.
21 (iii) For
a claimant with total household resources of more
22 than $22,000.00 and less than or equal to $23,000.00, an amount
23 equal to 92% of the difference between the property taxes on the
24 homestead or the credit for rental of the homestead for the tax
25 year and 3.5% of total household resources.
26 (iv) For
a claimant with total household resources of more
27 than $23,000.00 and less than or equal to $24,000.00, an amount
1 equal to 88% of the difference between the property taxes on the
2 homestead or the credit for rental of the homestead for the tax
3 year and 3.5% of total household resources.
4 (v) For a
claimant with total household resources of more
5 than $24,000.00 and less than or equal to $25,000.00, an amount
6 equal to 84% of the difference between the property taxes on the
7 homestead or the credit for rental of the homestead for the tax
8 year and 3.5% of total household resources.
9 (vi) For
a claimant with total household resources of more
10 than $25,000.00 and less than or equal to $26,000.00, an amount
11 equal to 80% of the difference between the property taxes on the
12 homestead or the credit for rental of the homestead for the tax
13 year and 3.5% of total household resources.
14 (vii) For
a claimant with total household resources of more
15 than $26,000.00 and less than or equal to $27,000.00, an amount
16 equal to 76% of the difference between the property taxes on the
17 homestead or the credit for rental of the homestead for the tax
18 year and 3.5% of total household resources.
19 (viii)
For a claimant with total household resources of more
20 than $27,000.00 and less than or equal to $28,000.00, an amount
21 equal to 72% of the difference between the property taxes on the
22 homestead or the credit for rental of the homestead for the tax
23 year and 3.5% of total household resources.
24 (ix) For
a claimant with total household resources of more
25 than $28,000.00 and less than or equal to $29,000.00, an amount
26 equal to 68% of the difference between the property taxes on the
27 homestead or the credit for rental of the homestead for the tax
1 year and 3.5% of total household resources.
2 (x) For a
claimant with total household resources of more
3 than $29,000.00 and less than or equal to $30,000.00, an amount
4 equal to 64% of the difference between the property taxes on the
5 homestead or the credit for rental of the homestead for the tax
6 year and 3.5% of total household resources.
7 (xi) For
a claimant with total household resources of more
8 than $30,000.00, an amount equal to 60% of the difference between
9 the property taxes on the homestead or the credit for rental of
10 the homestead for the tax year and 3.5% of total household
11 resources.
12 (b) (c) A
claimant who is a senior citizen with total
13 household resources of $21,000.00 or less or a paraplegic,
14 hemiplegic, or quadriplegic and for tax years that begin after
15 December 31, 1999, a claimant who is totally and permanently
16 disabled or deaf is entitled to a credit against the state income
17 tax liability for the amount by which the property taxes on the
18 homestead, the credit for rental of the homestead, or a service
19 charge in lieu of ad valorem taxes as provided by section 15a of
20 the state housing development authority act of 1966, 1966 PA 346,
21 MCL 125.1415a, for the tax year exceeds the percentage of the
22 claimant's total household resources for that tax year computed
23 as follows:
24 Total household resources Percentage
25 Not over $3,000.00 .0%
26 Over $3,000.00 but not over $4,000.00 1.0%
1 Over $4,000.00 but not over $5,000.00 2.0%
2 Over $5,000.00 but not over $6,000.00 3.0%
3 Over $6,000.00 3.5%
4 (d) A claimant who is an eligible serviceperson, eligible
5 veteran, or eligible widow or widower is entitled to a credit
6 against the state income tax liability for a percentage of the
7 property taxes on the homestead for the tax year not in excess of
8 100% determined as follows:
9 (i) Divide the taxable value allowance specified in section
10 506 by the taxable value of the homestead or, if the eligible
11 serviceperson, eligible veteran, or eligible widow or widower
12 leases or rents a homestead, divide 17% of the total annual rent
13 paid for tax years before the 1994 tax year, or 20% of the total
14 annual rent paid for tax years after the 1993 tax year on the
15 property by the property tax rate on the property.
16 (ii) Multiply the property taxes on the homestead by the
17 percentage computed in subparagraph (i).
18 (e) A claimant who is blind is entitled to a credit against
19 the state income tax liability for a percentage of the property
20 taxes on the homestead for the tax year determined as follows:
21 (i) If the taxable value of the homestead is $3,500.00 or
22 less, 100% of the property taxes.
23 (ii) If the taxable value of the homestead is more than
24 $3,500.00, the percentage that $3,500.00 bears to the taxable
25 value of the homestead.
26 (2) A person who is qualified to make a claim under more
27 than 1 classification shall elect the classification under which
1 the claim is made.
2 (3) Only 1 claimant per household for a tax year is entitled
3 to the credit, unless both the husband and wife filing a joint
4 return are blind, then each shall be considered a claimant.
5 (4) As used in this section, "totally and permanently
6 disabled" means disability as defined in section 216 of title II
7 of the social security act, 42 USC 416.
8 (5) A senior citizen who has total household resources for
9 the tax year of $6,000.00 or less and who for 1973 received a
10 senior citizen homestead exemption under former section 7c of the
11 general property tax act, 1893 PA 206, may compute the credit
12 against the state income tax liability for a percentage of the
13 property taxes on the homestead for the tax year determined as
14 follows:
15 (a) If the taxable value of the homestead is $2,500.00 or
16 less, 100% of the property taxes.
17 (b) If the taxable value of the homestead is more than
18 $2,500.00, the percentage that $2,500.00 bears to the taxable
19 value of the homestead.
20 (6) For a return of less than 12 months, the claim shall be
21 reduced proportionately.
22 (7) The department may prescribe tables that may be used to
23 determine the amount of the claim.
24 (8) The total credit allowed in this section for each year
25 after December 31, 1975 shall not exceed $1,200.00 per year.
26 (9) The total credit allowable under this part and part 361
27 of the natural resources and environmental protection act, 1994
1 PA 451, MCL 324.36101 to 324.36117, shall not exceed the total
2 property tax due and payable by the claimant in that year. The
3 amount by which the credit exceeds the property tax due and
4 payable shall be deducted from the credit claimed under part 361
5 of the natural resources and environmental protection act, 1994
6 PA 451, MCL 324.36101 to 324.36117.