SB-0863, As Passed Senate, February 11, 2004                                

SUBSTITUTE FOR

SENATE BILL NO. 863

                                                                             A bill to amend 1967 PA 281, entitled                                             

"Income tax act of 1967,"                                                   

(MCL 206.1 to 206.532) by adding section 51f.                               

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1   Sec. 51f.  (1) For tax years that begin after December 31,                  

2   2003, a taxpayer that is a qualified start-up business that does            

3   not have net income attributable to that qualified start-up                 

4   business for 2 consecutive tax years may claim a credit against             

5   the tax imposed under this act for the second of those 2                    

6   consecutive tax years and each immediately following consecutive            

7   tax year in which the taxpayer does not have net income                     

8   attributable to that qualified start-up business equal to that              

9   portion of the taxpayer's tax liability attributable to that                

10  qualified start-up business for the tax year.  If the taxpayer              

11  has net income attributable to the qualified start-up business in           

Senate Bill No. 863 as amended February 11, 2004                            

1   any of the intervening tax years, the 2 consecutive tax years               

2   without net income attributable to the qualified start-up                   

3   business threshold must be met after the tax year in which the              

4   taxpayer has net income attributable to the qualified start-up              

5   business before the taxpayer may claim the credit under this                

6   section for any following tax year.  A credit under this section            

7   shall not be claimed for more than a total of 5 tax years.  <<If a qualified start-up business leaves this state within 3 years after the expiration of the credit prescribed in this section, the qualified start-up business is liable for that proportional amount of the credit received under this section.>>

8       (2) As used in this section, "net income" and "qualified                    

9   start-up business" mean those terms as defined in section 31a of            

10  the single business tax act, 1975 PA 228, MCL 208.31a.