HOUSE BILL NO. 6237

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

(MCL 206.1 to 206.847) by adding sections 279 and 679.

the people of the state of michigan enact:

Sec. 279. (1) For tax years that begin on and after January 1, 2023, a taxpayer may claim a credit against the tax imposed by this part equal to 10% of the total amount paid to purchase and install a photovoltaic energy system during the tax year. For a taxpayer who is a member of a flow-through entity that is eligible for the credit under this section, that taxpayer may claim credit against the member's tax liability under this part based on the member's distributive share of business income reported from that flow-through entity or an alternative method approved by the department. The department shall prescribe the form and manner in which a taxpayer shall claim a credit under this section. The department may require reasonable proof from the taxpayer in support of the expenses claimed under this section.

(2) 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 but may be carried forward to offset tax liability under this part in subsequent tax years for a period not to exceed 5 tax years or until used up, whichever occurs first.

(3) As used in this section and section 679:

(a) "Photovoltaic cells" means an integrated device consisting of layers of semiconductor materials and electric constructs capable of converting incident light directly into electricity.

(b) "Photovoltaic energy" means solar energy.

(c) "Photovoltaic energy system" means solar energy devices composed of 1 or more photovoltaic cells or photovoltaic modules, and inverter or other power conditioning unit or photovoltaic technology designed to deliver power of a selected current and voltage, wires, and other electrical connectors in order to generate electricity, heat or cool a structure, provide hot water for use in a structure, or provide solar process heat. Batteries for power storage may also be included in photovoltaic energy systems.

(d) "Photovoltaic modules" means an assembly of interconnected photovoltaic cells.

(e) "Photovoltaic technology" means solar power technology that uses photovoltaic cells and photovoltaic modules to convert light from the sun directly into electricity. Photovoltaic technology includes equipment, component parts, materials, electronic devices, testing equipment, and other related systems that are specifically designed or fabricated and used primarily for 1 or more of the following:

(i) The storage, generation, reformation, or distribution of clean fuels integrated within a photovoltaic energy system.

(ii) The process of utilizing photovoltaic energy to generate electricity for use by consumers.

Sec. 679. (1) For tax years that begin on and after January 1, 2023, a taxpayer may claim a credit against the tax imposed by this part equal to 10% of the total amount paid to purchase and install a photovoltaic energy system during the tax year. The department shall prescribe the form and manner in which a taxpayer shall claim a credit under this section. The department may require reasonable proof from the taxpayer in support of the expenses claimed under this section.

(2) 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 but may be carried forward to offset tax liability under this part in subsequent tax years for a period not to exceed 5 tax years or until used up, whichever occurs first.