SB-0821, As Passed Senate, December 17, 2003                                

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 821

                                                                             A bill to amend 1975 PA 228, entitled                                             

"Single business tax act,"                                                  

by amending section 37c (MCL 208.37c), as amended by 2000 PA                

429.                                                                        

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 37c.  (1) For tax years beginning after December 31,                   

2   1994 and for a period of time not to exceed 20 years as                     

3   determined by the Michigan economic growth authority, a taxpayer            

4   that is an authorized business may credit against the tax imposed           

5   by section 31 the amount certified each year by the Michigan                

6   economic growth authority.                                                  

7       (2) The credit allowed under  this section subsection (1)

8   for an authorized business for the tax year as determined under             

9   the Michigan economic growth authority act, 1995 PA 24, MCL                 

10  207.801 to 207.810, shall not exceed the payroll of the                     

1   authorized business attributable to employees who perform                   

2   qualified new jobs multiplied by the tax rate.                              

3       (3) A taxpayer shall not claim a credit under this section                  

4   unless the Michigan economic growth authority has issued a                  

5   certificate to the taxpayer.  The taxpayer shall attach the                 

6   certificate to the return filed under this act on which a credit            

7   under this section is claimed.                                              

8       (4) The certificate required by subsection (3) shall state                  

9   all of the following:                                                       

10      (a) The taxpayer is an authorized business.                                 

11      (b) The amount of the credit under this section for the                     

12  authorized business for the designated tax year.                            

13      (c) The taxpayer's federal employer identification number or                

14  the Michigan treasury number assigned to the taxpayer.                      

15  (d) For a taxpayer that claims a credit allowed under                       

16  subsection (10), the taxpayer is a distressed business.

17      (5) If the credit allowed under  this section subsection (1)

18  exceeds the tax liability of the taxpayer for the tax year, the             

19  excess shall be refunded to the taxpayer.                                   

20      (6) A taxpayer that claims a credit under  this section

21  subsection (1) or section 37d that has an agreement with the                

22  Michigan economic growth authority based on qualified new jobs as           

23  defined in section 3(j)(ii) of the Michigan economic growth                  

24  authority act, 1995 PA 24, MCL 207.803, that removes from this              

25  state 51% or more of those qualified new jobs within 3 years                

26  after the first year in which the taxpayer claims a credit                  

27  described in this subsection shall pay to the department no later           

Senate Bill 821 (H-2) as amended December 10, 2003                          

1   than 12 months after those qualified new jobs are removed from              

2   the state an amount equal to the total of all credits described             

3   in this subsection that were claimed by the taxpayer.                       

4   (7) [If the Michigan economic growth authority or a designee

5   of the Michigan economic growth authority requests that a taxpayer

6   who claims the credit under this section get a statement prepared by       

7   a certified public accountant verifying that the actual number of          

8   new jobs created is the same number of new jobs used to calculate the      

9   credit under this section, the taxpayer shall get the statement and        

10  attach that statement to its annual return under this act on which         

11  the credit under this section is claimed.]                                 

12  (8)  (7) An For a credit allowed under subsection (1), an

13  affiliated group as defined in this act, a controlled group of              

14  corporations as defined in section 1563 of the internal revenue             

15  code and further described in 26  C.F.R. CFR 1.414(b)-1 and                

16  1.414(c)-1 to 1.414(c)-5, or an entity under common control as              

17  defined by the internal revenue code shall claim only 1 credit              

18  under this section  for each tax year for each expansion or                

19  location evidenced by a written agreement whether or not a                  

20  combined or consolidated return is filed.                                   

21  (9)  (8)  A credit shall not be claimed by a taxpayer under                 

22  this section subsection (1) if the taxpayer's initial                     

23  certification as required in subsection (3) is issued after                 

24  December 31,  2003 2009.                                                   

25  (10) In addition to the credit allowed under subsection (1),                

26  for tax years that begin after December 31, 2003 and before                 

27  January 1, 2007, a taxpayer that is an authorized business and is           

1   a distressed business, with an initial certification under                  

2   section 9 of the Michigan economic growth authority act, 1995 PA            

3   24, MCL 207.809, issued after December 31, 2003 and before                  

4   January 1, 2005 may claim a credit equal to the sum of the                  

5   following:                                                                  

6       (a) Up to 50% of the tax paid in the tax year under the                     

7   Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.1            

8   to 421.75, based on qualified new jobs as defined in section                

9   3(k)(iii) of the Michigan economic growth authority act, 1995 PA             

10  24, MCL 207.803.                                                            

11      (b) Up to 25% of the tax paid in the tax year under the                     

12  Michigan employment security act, 1936 (Ex Sess) PA 1, MCL 421.1            

13  to 421.75, based on all jobs other than qualified new jobs as               

14  defined in section 3(k)(iii) of the Michigan economic growth                 

15  authority act, 1995 PA 24, MCL 207.803.                                     

16      (11) An authorized business that is a distressed business                   

17  shall apply to the Michigan economic growth authority, which                

18  shall determine the percentage under subsection (10) for that               

19  authorized business.  The Michigan economic growth authority                

20  shall issue a certificate to the authorized business stating the            

21  percentage amount and the tax years to which that percentage                

22  applies not more than 30 days after receipt of an application               

23  under this subsection.                                                      

24      (12) If the credit allowed under subsection (10) for the tax                

25  year and any unused carryforward of the credit allowed under this           

26  section exceed the tax liability of the taxpayer for the tax                

27  year, the excess shall not be refunded, but may be carried                  

1   forward as an offset to the tax liability in subsequent tax years           

2   for 10 tax years or until the excess credit is used up, whichever           

3   occurs first.

4   (13)  (9)  As used in this section:                                         

5       (a) "Authority" or "Michigan economic growth authority" means               

6   the Michigan economic growth authority created in the Michigan              

7   economic growth authority act, 1995 PA 24, MCL 207.801 to                   

8   207.810.                                                                    

9       (b) "Authorized business", "facility", "full-time job",                     

10  "qualified high-technology business", and "written agreement"               

11  mean those terms as defined in the Michigan economic growth                 

12  authority act, 1995 PA 24, MCL 207.801 to 207.810.                          

13      (c) "Payroll" means the total salaries and wages before                     

14  deducting any personal or dependency exemptions.                            

15      (d) "Qualified new jobs" means 1 or more of the following:                  

16                                                                               (i)  The For a credit allowed under subsection (1), the

17  average number of full-time jobs at a facility of an authorized             

18  business for a tax year in excess of the average number of                  

19  full-time jobs the authorized business maintained in this state             

20  prior to the expansion or location as that is determined under              

21  the Michigan economic growth authority act, 1995 PA 24, MCL                 

22  207.801 to 207.810.                                                         

23      (ii) After July 1, 2000 for a credit allowed under subsection                

24  (1), the average number of full-time jobs at a facility created             

25  by an eligible business within 120 days before becoming an                  

26  authorized business, that is in excess of the average number of             

27  full-time jobs that the business maintained in this state 120               

1   days before becoming an authorized business, as determined under            

2   the Michigan economic growth authority act, 1995 PA 24, MCL                 

3   207.801 to 207.810.                                                         

4   (iii) For credits allowed under subsection (10), that term as                

5   defined in section 3(k)(iii) of the Michigan economic growth                 

6   authority act, 1995 PA 24, MCL 207.803.

7       (e) "Tax rate" means the rate imposed under sections 51,  and               

8   51b to 51e 51d, and 51e of the income tax act of 1967, 1967 PA             

9   281, MCL 206.51,  and 206.51b to 206.51e 206.51d, and 206.51e,             

10  for the tax year in which the tax year of the taxpayer for which            

11  the credit is being computed begins.                                        

12      Enacting section 1.  This act does not take effect unless                   

13  House Bill No. 5255 of the 92nd Legislature is enacted into law.