Bill Text: MI HB4847 | 2023-2024 | 102nd Legislature | Introduced

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Bill Title: Individual income tax: credit; incentives for the sale and production of biodiesel; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 277a & 677a.

Spectrum: Moderate Partisan Bill (Democrat 4-1)

Status: (Introduced) 2023-06-28 - Bill Electronically Reproduced 06/27/2023 [HB4847 Detail]

Download: Michigan-2023-HB4847-Introduced.html

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HOUSE BILL NO. 4847

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

(MCL 206.1 to 206.847) by adding sections 277a and 677a.

the people of the state of michigan enact:

Sec. 277a. (1) Subject to subsection (4), for tax years beginning on and after January 1, 2024 through December 31, 2029, a taxpayer who is a retail dealer may claim a credit against the tax imposed by this part equal to the sum of the following:

(a) $0.02 per gallon of B5+ fuel that the retail dealer sells and dispenses through metered pumps at the retail dealer's motor fuel site during the tax year.

(b) $0.05 per gallon of B11+ fuel that the retail dealer sells and dispenses through metered pumps at the retail dealer's motor fuel site during the tax year.

(2) Subject to the limitation under this subsection, for tax years beginning on and after January 1, 2024 through December 31, 2029, a taxpayer who is a biodiesel producer in this state may claim a credit against the tax imposed by this part equal to $0.02 per gallon of biodiesel produced in this state during the tax year. The aggregate amount of credits allowed under this subsection and section 677a(2) during a tax year shall not exceed $2,000,000.00. If the aggregate amount of credits claimed under this subsection and 677a(2) exceeds the cap, the amount of the credit allowed for each taxpayer is limited to the taxpayer's pro rata share. The taxpayer's pro rata share shall be the aggregate amount of the credit allowed multiplied by a fraction the numerator of which is the amount of credit claimed by the taxpayer under this subsection for that tax year and the denominator of which is the sum of the credits claimed by all taxpayers under this subsection and 677a(2) for that tax year.

(3) For a taxpayer who is a member of a flow-through entity that qualifies for the credit under this section, that taxpayer may claim a 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.

(4) The aggregate amount of credits allowed under subsection (1) and section 677a(1) during a tax year shall not exceed $16,000,000.00. If the aggregate amount of credits claimed under subsection (1) and 677a(1) exceeds the cap, the amount of the credit allowed for each taxpayer is limited to the taxpayer's pro rata share. The taxpayer's pro rata share shall be the aggregate amount of the credit allowed multiplied by a fraction the numerator of which is the amount of credit claimed by the taxpayer under subsection (1) for that tax year and the denominator of which is the sum of the credits claimed by all taxpayers under subsection (1) and 677a(1) for that tax year.

(5) If the credit allowed under this section for the tax year exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability shall be refunded.

(6) As used in this section:

(a) "ASTM" means the American Section of the International Association for Testing Materials.

(b) "B5+ fuel" means a biodiesel blend containing at least 5% biodiesel, but not more than 10% biodiesel that meets the ASTM international standard D975 or D7467, whichever is applicable.

(c) "B11+ fuel" means a biodiesel blend containing more than 10% biodiesel that meets the ASTM international standard D7467.

(d) "Biodiesel" means a diesel fuel substitute consisting of methyl or ethyl esters produced from the transesterification of animal or vegetable fats with methanol or ethanol that meets the ASTM international standard D6751.

(e) "Biodiesel blend" means a blended motor fuel comprised of a blend of biodiesel fuel with petroleum-based diesel fuel, suitable for use as a fuel in a compression-ignition internal combustion diesel engine.

(f) "Blended motor fuel" and "diesel fuel" mean those terms as defined in section 2 of the motor fuel tax act, 2000 PA 403, MCL 207.1002.

(g) "Motor fuel" means that term as defined in section 4 of the motor fuel tax act, 2000 PA 403, MCL 207.1004.

(h) "Motor fuel site" means an establishment at which motor fuel is sold or offered for sale to the public.

(i) "Retail dealer" means the ultimate vendor as that term is defined in section 6 of the motor fuel tax act, 2000 PA 403, MCL 207.1006.

Sec. 677a. (1) Subject to subsection (3), for tax years beginning on and after January 1, 2024 through December 31, 2029, a taxpayer who is a retail dealer may claim a credit against the tax imposed by this part equal to the sum of the following:

(a) $0.02 per gallon of B5+ fuel that the retail dealer sells and dispenses through metered pumps at the retail dealer's motor fuel site during the tax year.

(b) $0.05 per gallon of B11+ fuel that the retail dealer sells and dispenses through metered pumps at the retail dealer's motor fuel site during the tax year.

(2) Subject to the limitation under this subsection, for tax years beginning on and after January 1, 2024 through December 31, 2029, a taxpayer who is a biodiesel producer in this state may claim a credit against the tax imposed by this part equal to $0.02 per gallon of biodiesel produced in this state during the tax year. The aggregate amount of credits allowed under this subsection and section 277a(2) during a tax year shall not exceed $2,000,000.00. If the aggregate amount of credits claimed under this subsection and 277a(2) exceeds the cap, the amount of the credit allowed for each taxpayer is limited to the taxpayer's pro rata share. The taxpayer's pro rata share shall be the aggregate amount of the credit allowed multiplied by a fraction the numerator of which is the amount of credit claimed by the taxpayer under this subsection for that tax year and the denominator of which is the sum of the credits claimed by all taxpayers under this subsection and 277a(2) for that tax year.

(3) The aggregate amount of credits allowed under subsection (1) and section 277a(1) during a tax year shall not exceed $16,000,000.00. If the aggregate amount of credits claimed under subsection (1) and 277a(1) exceeds the cap, the amount of the credit allowed for each taxpayer is limited to the taxpayer's pro rata share. The taxpayer's pro rata share shall be the aggregate amount of the credit allowed multiplied by a fraction the numerator of which is the amount of credit claimed by the taxpayer under subsection (1) for that tax year and the denominator of which is the sum of the credits claimed by all taxpayers under subsection (1) and 277a(1) for that tax year.

(4) If the credit allowed under this section for the tax year exceeds the tax liability of the taxpayer for the tax year, that portion of the credit that exceeds the tax liability shall be refunded.

(5) As used in this section:

(a) "ASTM" means the American Section of the International Association for Testing Materials.

(b) "B5+ fuel" means a biodiesel blend containing at least 5% biodiesel, but not more than 10% biodiesel that meets the ASTM international standard D975 or D7467, whichever is applicable.

(c) "B11+ fuel" means a biodiesel blend containing more than 10% biodiesel that meets the ASTM international standard D7467.

(d) "Biodiesel" means a diesel fuel substitute consisting of methyl or ethyl esters produced from the transesterification of animal or vegetable fats with methanol or ethanol that meets the ASTM international standard D6751.

(e) "Biodiesel blend" means a blended motor fuel comprised of a blend of biodiesel fuel with petroleum-based diesel fuel, suitable for use as a fuel in a compression-ignition internal combustion diesel engine.

(f) "Blended motor fuel" and "diesel fuel" mean those terms as defined in section 2 of the motor fuel tax act, 2000 PA 403, MCL 207.1002.

(g) "Motor fuel" means that term as defined in section 4 of the motor fuel tax act, 2000 PA 403, MCL 207.1004.

(h) "Motor fuel site" means an establishment at which motor fuel is sold or offered for sale to the public.

(i) "Retail dealer" means the ultimate vendor as that term is defined in section 6 of the motor fuel tax act, 2000 PA 403, MCL 207.1006.