Bill Text: MI HB5384 | 2009-2010 | 95th Legislature | Engrossed
Bill Title: Michigan business tax; rate; general amendments; provide for. Amends secs. 201, 203, 235, 263, 281, 403 & 405 of 2007 PA 36 (MCL 208.1201 et seq.).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2009-10-08 - Referred To Committee On Finance [HB5384 Detail]
Download: Michigan-2009-HB5384-Engrossed.html
HB-5384, As Passed House, October 6, 2009
HOUSE BILL No. 5384
(As amended October 6, 2009)
September 17, 2009, Introduced by Rep. Cushingberry and referred to the Committee on Tax Policy.
[A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending sections 201, 203, 235, 263, 281, 403, and 405 (MCL
208.1201, 208.1203, 208.1235, 208.1263, 208.1281, 208.1403, and
208.1405), sections 201 and 203 as amended by 2008 PA 168, section
235 as amended by 2008 PA 30, section 281 as added and section 405
as amended by 2007 PA 145, and section 403 as amended by 2008 PA
434, and by adding section 462.]
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 201. (1) Except as otherwise provided in this act, there
is levied and imposed a business income tax on every taxpayer with
business activity within this state unless prohibited by 15 USC 381
to 384. The business income tax is levied and imposed on the
business income tax base, after allocation or apportionment to this
state, at the rate of 4.95%.
(2) The business income tax base means a taxpayer's business
income subject to the following adjustments, before allocation or
apportionment, and the adjustments in subsections (5), (6), and (7)
after allocation or apportionment:
(a) Add interest income and dividends derived from obligations
or securities of states other than this state, in the same amount
that was excluded from federal taxable income, less the related
portion of expenses not deducted in computing federal taxable
income because of sections 265 and 291 of the internal revenue
code.
(b) Add all taxes on or measured by net income and the tax
imposed under this act to the extent the taxes were deducted in
arriving at federal taxable income.
(c) Add any carryback or carryover of a net operating loss to
the extent deducted in arriving at federal taxable income.
(d) To the extent included in federal taxable income, deduct
dividends and royalties received from persons other than United
States persons and foreign operating entities, including, but not
limited to, amounts determined under section 78 of the internal
revenue code or sections 951 to 964 of the internal revenue code.
(e) To the extent included in federal taxable income, add the
loss or subtract the income from the business income tax base that
is attributable to another entity whose business activities are
taxable under this section or would be subject to the tax under
this section if the business activities were in this state.
(f) Except as otherwise provided under this subdivision, to
the extent deducted in arriving at federal taxable income, add any
royalty, interest, or other expense paid to a person related to the
taxpayer by ownership or control for the use of an intangible asset
if the person is not included in the taxpayer's unitary business
group. The addition of any royalty, interest, or other expense
described under this subdivision is not required to be added if the
taxpayer can demonstrate that the transaction has a nontax business
purpose other than avoidance of this tax, is conducted with arm's-
length pricing and rates and terms as applied in accordance with
sections 482 and 1274(d) of the internal revenue code, and
satisfies 1 of the following:
(i) Is a pass through of another transaction between a third
party and the related person with comparable rates and terms.
(ii) Results in double taxation. For purposes of this
subparagraph, double taxation exists if the transaction is subject
to tax in another jurisdiction.
(iii) Is unreasonable as determined by the treasurer, and the
taxpayer agrees that the addition would be unreasonable based on
the taxpayer's facts and circumstances.
(g) To the extent included in federal taxable income, deduct
interest income derived from United States obligations.
(h) To the extent included in federal taxable income, deduct
any earnings that are net earnings from self-employment as defined
under section 1402 of the internal revenue code of the taxpayer or
a partner or limited liability company member of the taxpayer
except to the extent that those net earnings represent a reasonable
return on capital.
(i) Subject to the limitation provided under this subdivision,
if the book-tax differences for the first fiscal period ending
after July 12, 2007 result in a deferred liability for a person
subject to tax under this act, deduct the following percentages of
the total book-tax difference for each qualifying asset, for each
of the successive 15 tax years beginning with the 2015 tax year:
(i) For the 2015 through 2019 tax years, 4%.
(ii) For the 2020 through 2024 tax years, 6%.
(iii) For the 2025 through 2029 tax years, 10%.
(3) The deduction under subsection (2)(i) shall not exceed the
amount necessary to offset the net deferred tax liability of the
taxpayer as computed in accordance with generally accepted
accounting principles which would otherwise result from the
imposition of the business income tax under this section and the
modified gross receipts tax under section 203 if the deduction
provided under this subdivision were not allowed. The deduction
under subsection (2)(i) is intended to flow through and reduce the
surcharge imposed and levied under section 281. For purposes of the
calculation of the deduction under subsection (2)(i), a book-tax
difference shall only be used once in the calculation of the
deduction arising from the taxpayer's business income tax base
under this section and once in the calculation of the deduction
arising from the taxpayer's modified gross receipts tax base under
section 203. The adjustment under subsection (2)(i) shall be
calculated without regard to the federal effect of the deduction.
If the adjustment under subsection (2)(i) is greater than the
taxpayer's business income tax base, any adjustment that is unused
may be carried forward and applied as an adjustment to the
taxpayer's business income tax base before apportionment in future
years. In order to claim this deduction, the department may require
the taxpayer to report the amount of this deduction on a form as
prescribed by the department that is to be filed on or after the
date that the first quarterly return and estimated payment are due
under this act. As used in subsection (2)(i) and this subsection:
(a) "Book-tax difference" means the difference, if any,
between the person's qualifying asset's net book value shown on the
person's books and records for the first fiscal period ending after
July 12, 2007 and the qualifying asset's tax basis on that same
date.
(b) "Qualifying asset" means any asset shown on the person's
books and records for the first fiscal period ending after July 12,
2007, in accordance with generally accepted accounting principles.
(4) For purposes of subsections (2) and (3), the business
income of a unitary business group is the sum of the business
income of each person, other than a foreign operating entity or a
person subject to the tax imposed under chapter 2A or 2B, included
in the unitary business group less any items of income and related
deductions arising from transactions including dividends between
persons included in the unitary business group.
(5) Deduct any available business loss incurred after December
31, 2007. As used in this subsection, "business loss" means a
negative business income taxable amount after allocation or
apportionment. The business loss shall be carried forward to the
year immediately succeeding the loss year as an offset to the
allocated or apportioned business income tax base, then
successively to the next 9 taxable years following the loss year or
until the loss is used up, whichever occurs first, but for not more
than 10 taxable years after the loss year.
(6) Deduct any gain from the sale of any residential rental
units in this state to a qualified affordable housing project that
enters an agreement to operate the residential rental units as rent
restricted units for a minimum of 15 years. If the qualified
affordable housing project does not agree to operate all of the
residential rental units as rent restricted units, the deduction
under this subsection is limited to an amount equal to the gain
from the sale multiplied by a fraction, the numerator of which is
the number of those residential rental units purchased that are to
be operated as a rent restricted unit and the denominator is the
number of all residential rental units purchased. In order to claim
this deduction, the department may require the taxpayer and the
qualified affordable housing project to report the amount of this
deduction on a form as prescribed by the department that is to be
signed by both the taxpayer and the qualified affordable housing
project and filed with the taxpayer's annual return. The department
shall record a lien against the property subject to the operation
agreement for the total amount of the deduction allowed under this
subsection. The department shall notify the qualified affordable
housing project of the maximum amount of the lien that the
qualified affordable housing project may be liable for if the
qualified affordable housing project fails to qualify and operate
as provided in the operation agreement within 15 years after the
purchase. The lien shall become payable in an amount as provided
under this subsection to the state by the qualified affordable
housing project if the qualified affordable housing project fails
to qualify as a qualified affordable housing project and fails to
operate all or some of the residential rental units as rent
restricted units in accordance with the operation agreement entered
upon the purchase of those units within 15 years after the
deduction is claimed by a taxpayer under this subsection. An amount
equal to the product of 100% of the amount of the deduction allowed
under this subsection multiplied by a fraction, the numerator of
which is the difference between 15 and the number of years the
affordable housing project qualified and operated rent restricted
units in accordance with the agreement and the denominator is 15,
shall be added back to the tax liability of the qualified
affordable housing project for the tax year that the qualified
affordable housing project fails to comply with the agreement.
(7) Subject to the limitations provided in this subsection,
for a person that is a qualified affordable housing project, deduct
an amount equal to the product of that person's taxable income that
is attributable to residential rental units in this state owned by
the qualified affordable housing project multiplied by a fraction,
the numerator of which is the number of rent restricted units in
this state owned by that qualified affordable housing project and
the denominator of which is the number of all residential rental
units in this state owned by the qualified affordable housing
project. The amount of the deduction calculated under this
subsection shall be reduced by the amount of limited dividends or
other distributions made to the partners, members, or shareholders
of the qualified affordable housing project. Taxable income that is
attributable to residential rental units does not include income
received by the management, construction, or development company
for completion and operation of the project and those rental units.
(8) If a qualified affordable housing project no longer meets
the requirements of subsection (9)(b) or fails to operate those
residential rental units as rent restricted units in accordance
with the operation agreement and the requirements of subsection
(9)(c), the taxpayer is entitled to the deductions under
subsections (6) and (7) as long as the qualified affordable housing
project continues to offer some of the residential rental units
purchased as rent restricted units in accordance with the operation
agreement.
(9) For purposes of subsections (6), (7), and (8) and this
subsection:
(a) "Limited dividend housing association" means a limited
dividend housing association, corporation, or cooperative organized
and qualified pursuant to chapter 7 of the state housing
development authority act of 1966, 1966 PA 346, MCL 125.1491 to
125.1496.
(b) "Qualified affordable housing project" means a person that
is organized, qualified, and operated as a limited dividend housing
association that has a limitation on the amount of dividends or
other distributions that may be distributed to its owners in any
given year and has received funding, subsidies, grants, operating
support, or construction or permanent funding through 1 or more of
the following sources and programs:
(i) Mortgage or other financing provided by the Michigan state
housing development authority created in section 21 of the state
housing development authority act of 1966, 1966 PA 346, MCL
125.1421, the United States department of housing and urban
development, the United States department of agriculture for rural
housing service, the Michigan interfaith housing trust fund,
Michigan housing and community development fund, federal home loan
bank, housing commission loan, community development financial
institution, or mortgage or other funding or guaranteed by Fannie,
Ginnie, federal housing association, United States department of
agriculture, or federal home loan mortgage corporation.
(ii) A tax-exempt bond issued by a nonprofit organization,
local governmental unit, or other authority.
(iii) A payment in lieu of tax agreement or other tax abatement.
(iv) Funding from the state or a local governmental unit
through a HOME investments partnership program authorized under 42
USC 12741 to 12756.
(v) A grant or other funding from a federal home loan bank's
affordable housing program.
(vi) Financing or funding under the new markets tax credit
program under section 45D of the internal revenue code.
(vii) Financed in whole or in part under the United States
department of housing and urban development's hope VI program as
authorized by section 803 of the national affordable housing act,
42 USC 8012.
(viii) Financed in whole or in part under the United States
department of housing and urban development's section 202 program
authorized by section 202 of the national housing act, 12 USC
1701q.
(ix) Financing or funding under the low-income housing tax
credit program under section 42 of the internal revenue code.
(x) Financing or other subsidies from any new programs similar
to any of the above.
(c) "Rent restricted unit" means any residential rental unit's
rental income is restricted in accordance with section 42(g)(1) of
the internal revenue code as if it was a qualified low-income
housing project, or receives rental assistance in the form of HUD
section 8 subsidies or HUD housing assistance program subsidies, or
rental assistance from the United States department of agriculture
rural housing programs, or from any of the other programs described
under subdivision (b).
Sec. 203. (1) Except as otherwise provided in this act, there
is levied and imposed a modified gross receipts tax on every
taxpayer with nexus as determined under section 200. The modified
gross receipts tax is levied and imposed on the modified gross
receipts tax base, after allocation or apportionment to this state
at a rate of 0.80%.
(2) The tax levied and imposed under this section is upon the
privilege of doing business and not upon income or property.
(3) The modified gross receipts tax base means a taxpayer's
gross receipts subject to the adjustment in subsection (6), if
applicable, less purchases from other firms before apportionment
under this act. The modified gross receipts of a unitary business
group is the sum of modified gross receipts of each person, other
than a foreign operating entity or a person subject to the tax
imposed under chapter 2A or 2B, included in the unitary business
group less any modified gross receipts arising from transactions
between persons included in the unitary business group.
(4) For the 2008 tax year, deduct 65% of any remaining
business loss carryforward calculated under section 23b(h) of
former 1975 PA 228 that was actually incurred in the 2006 or 2007
tax year to the extent not deducted in tax years beginning before
January 1, 2008. A deduction under this subsection shall not
include any business loss carryforward that was incurred before
January 1, 2006. If the taxpayer is a unitary business group, the
business loss carryforward under this subsection may only be
deducted against the modified gross receipts tax base of that
person included in the unitary business group calculated as if the
person was not included in the unitary business group.
(5) Nothing in this act shall prohibit a taxpayer who
qualifies for the credit under section 445 or a taxpayer who is a
dealer of new or used personal watercraft from collecting the tax
imposed under this section in addition to the sales price. The
amount remitted to the department for the tax under this section
shall not be less than the stated and collected amount.
(6) Subject to the limitations provided in this subsection,
for a person that is a qualified affordable housing project, deduct
an amount equal to that person's total gross receipts attributable
to residential rental units in this state owned by the qualified
affordable housing project multiplied by a fraction, the numerator
of which is the number of rent restricted units in this state owned
by the qualified affordable housing project and the denominator of
which is the number of all rental units in this state owned by the
qualified affordable housing project. The amount of the deduction
calculated under this subsection shall be reduced by the amount of
limited dividends or other distributions made to the partners,
members, or shareholders of the qualified affordable housing
project. Gross receipts attributable to residential rental units do
not include amounts received by the management, construction, or
development company for completion and operation of the project and
those rental units.
(7) If a qualified affordable housing project no longer meets
the requirements of subsection (8)(b) or fails to operate those
residential rental units as rent restricted units in accordance
with the operation agreement and the requirements of subsection
(8)(c), the qualified affordable housing project is entitled to the
deduction under subsection (6) as long as the qualified affordable
housing project continues to offer some of the residential rental
units purchased as rent restricted units in accordance with the
operation agreement.
(8) For purposes of subsections (6) and (7) and this
subsection:
(a) "Limited dividend housing association" means a limited
dividend housing association, corporation, or cooperative organized
and qualified pursuant to chapter 7 of the state housing
development authority act of 1966, 1966 PA 346, MCL 125.1491 to
125.1496.
(b) "Qualified affordable housing project" means a person that
is organized, qualified, and operated as a limited dividend housing
association that has a limitation on the amount of dividends or
other distributions that may be distributed to its owners in any
given year and has received funding, subsidies, grants, operating
support, or construction or permanent funding through 1 or more of
the following sources and programs:
(i) Mortgage or other financing provided by the Michigan state
housing development authority created in section 21 of the state
housing development authority act of 1966, 1966 PA 346, MCL
125.1421, the United States department of housing and urban
development, the United States department of agriculture for rural
housing service, the Michigan interfaith housing trust fund,
Michigan housing and community development fund, federal home loan
bank, housing commission loan, community development financial
institution, or mortgage or other funding or guaranteed by Fannie,
Ginnie, federal housing association, United States department of
agriculture, or federal home loan mortgage corporation.
(ii) A tax-exempt bond issued by a nonprofit organization,
local governmental unit, or other authority.
(iii) A payment in lieu of tax agreement or other tax abatement.
(iv) Funding from the state or a local governmental unit
through a HOME investments partnership program authorized under 42
USC 12741 to 12756.
(v) A grant or other funding from a federal home loan bank's
affordable housing program.
(vi) Financing or funding under the new markets tax credit
program under section 45D of the internal revenue code.
(vii) Financed in whole or in part under the United States
department of housing and urban development's hope VI program as
authorized by section 803 of the national affordable housing act,
42 USC 8012.
(viii) Financed in whole or in part under the United States
department of housing and urban development's section 202 program
authorized by section 202 of the national housing act, 12 USC
1701q.
(ix) Financing or funding under the low-income housing tax
credit program under section 42 of the internal revenue code.
(x) Financing or other subsidies from any new programs similar
to any of the above.
(c) "Rent restricted unit" means any residential rental unit's
rental income is restricted in accordance with section 42(g)(1) of
the internal revenue code as if it was a qualified low-income
housing project, or receives rental assistance in the form of HUD
section 8 subsidies or HUD housing assistance program subsidies, or
rental assistance from the United States department of agriculture
rural housing programs, from any of the other programs described
under subdivision (b).
Sec. 235. (1) Except as otherwise provided under subsection
(4), each insurance company shall pay a tax determined under this
chapter.
(2) The tax levied and imposed by this chapter on each
insurance company shall be a tax equal to 1.25% of gross direct
premiums written on property or risk located or residing in this
state. Direct premiums do not include any of the following:
(a) Premiums on policies not taken.
(b) Returned premiums on canceled policies.
(c) Receipts from the sale of annuities.
(d) Receipts on reinsurance premiums if the tax has been paid
on the original premiums.
(e) The first $190,000,000.00 of disability insurance premiums
written in this state, other than credit insurance and disability
income insurance premiums, of each insurance company subject to tax
under this chapter. This exemption shall be reduced by $2.00 for
each $1.00 by which the insurance company's gross direct premiums
from insurance carrier services in this state and outside this
state exceed $280,000,000.00.
(3) The tax calculated under this chapter is in lieu of all
other privilege or franchise fees or taxes imposed by this act or
any other law of this state, except taxes on real and personal
property, taxes collected under the general sales tax act, 1933 PA
167, MCL 205.1 to 205.78, and taxes collected under the use tax
act, 1937 PA 94, MCL 205.91 to 205.111, and except as otherwise
provided in the insurance code of 1956, 1956 PA 218, MCL 500.100 to
500.8302.
(4) The tax imposed and levied under this act does not apply
to an insurance company authorized under chapter 46 or 47 of the
insurance code of 1956, 1956 PA 218, MCL 500.4601 to 500.4673, and
MCL 500.4701 to 500.4747.
Sec. 263. (1) Every financial institution with nexus in this
state as determined under section 200 is subject to a franchise
tax. The franchise tax is levied and imposed upon the tax base of
the financial institution as determined under section 265 after
allocation or apportionment to this state, at the rate of 0.235%.
(2) The tax under this chapter is in lieu of the tax levied
and imposed under chapter 2 of this act.
Sec. 281. (1) In addition to the taxes imposed and levied
under this act and subject to subsections (2), (3), and (4), to
meet deficiencies in state funds an annual surcharge is imposed and
levied on each taxpayer equal to the following percentage of the
taxpayer's tax liability under this act after allocation or
apportionment to this state under this act but before calculation
of the various credits available under this act:
(a) For each taxpayer other than a person subject to the tax
imposed and levied under chapter 2B, 21.99%.
(b) For a person subject to the tax imposed and levied under
chapter 2B:
(i) For tax years ending after December 31, 2007 and before
January 1, 2009, 27.7%.
(ii) For tax years ending after December 31, 2008, 23.4%.
(2) If the Michigan personal income growth exceeds 0% in any 1
of the 3 calendar years immediately preceding the 2017 calendar
year, then the surcharge under subsection (1) shall not be levied
and imposed on or after January 1, 2017. For purposes of this
subsection, "Michigan personal income" means personal income for
this state as defined by the bureau of economic analysis of the
United States department of commerce or its successor.
(3) The amount of the surcharge imposed and levied on any
taxpayer under subsection (1)(a) shall not exceed $6,000,000.00 for
any single tax year.
(4) The surcharge imposed and levied under this section does
not apply to either of the following:
(a) A person subject to the tax imposed and levied under
chapter 2A.
(b) A person subject to the tax imposed and levied under
chapter 2B that is authorized to exercise only trust powers.
(5) The surcharge imposed and levied under this section shall
constitute a part of the tax imposed and levied under this act and
shall be administered, collected, and enforced as provided under
this act.
Sec. 403. (1) Notwithstanding any other provision in this act,
the credits provided in this section shall be taken before any
other credit under this act. Except as otherwise provided in
subsection (6), for the 2008 tax year, the total combined credit
allowed under this section shall not exceed 50% of the tax
liability imposed under this act before the imposition and levy of
the
surcharge under section 281. For the 2009 tax year and each tax
year
after 2009 tax years that
begin after December 31, 2008, the
total combined credit allowed under this section shall not exceed
52% of the tax liability imposed under this act before the
imposition and levy of the surcharge under section 281.
(2) Subject to the limitation in subsection (1), for the 2008
tax year a taxpayer may claim a credit against the tax imposed by
this act equal to 0.296% of the taxpayer's compensation in this
state.
For the 2009 tax year and each tax year after 2009 tax years
that begin after December 31, 2008, subject to the limitation in
subsection (1), a taxpayer may claim a credit against the tax
imposed by this act equal to 0.370% of the taxpayer's compensation
in this state. For purposes of this subsection, a taxpayer includes
a person subject to the tax imposed under chapter 2A and a person
subject to the tax imposed under chapter 2B. A professional
employer organization shall not include payments by the
professional employer organization to the officers and employees of
a client of the professional employer organization whose employment
operations are managed by the professional employer organization. A
client may include payments by the professional employer
organization to the officers and employees of the client whose
employment operations are managed by the professional employer
organization.
(3) Subject to the limitation in subsection (1), for the 2008
tax year a taxpayer may claim a credit against the tax imposed by
this act equal to 2.32% multiplied by the result of subtracting the
sum of the amounts calculated under subdivisions (d), (e), and (f)
from the sum of the amounts calculated under subdivisions (a), (b),
and
(c). Subject to the limitation in subsection (1), for the 2009
tax
year and each tax year after 2009 tax
years that begin after
December 31, 2008, a taxpayer may claim a credit against the tax
imposed by this act equal to 2.9% multiplied by the result of
subtracting the sum of the amounts calculated under subdivisions
(d), (e), and (f) from the sum of the amounts calculated under
subdivisions (a), (b), and (c):
(a) Calculate the cost, including fabrication and
installation, paid or accrued in the taxable year of tangible
assets of a type that are, or under the internal revenue code will
become, eligible for depreciation, amortization, or accelerated
capital cost recovery for federal income tax purposes, provided
that the assets are physically located in this state for use in a
business activity in this state and are not mobile tangible assets.
(b) Calculate the cost, including fabrication and
installation, paid or accrued in the taxable year of mobile
tangible assets of a type that are, or under the internal revenue
code will become, eligible for depreciation, amortization, or
accelerated capital cost recovery for federal income tax purposes.
This amount shall be multiplied by the apportionment factor for the
tax year as prescribed in chapter 3.
(c) For tangible assets, other than mobile tangible assets,
purchased or acquired for use outside of this state in a tax year
beginning after December 31, 2007 and subsequently transferred into
this state and purchased or acquired for use in a business
activity, calculate the federal basis used for determining gain or
loss as of the date the tangible assets were physically located in
this state for use in a business activity plus the cost of
fabrication and installation of the tangible assets in this state.
(d) If the cost of tangible assets described in subdivision
(a) was paid or accrued in a tax year beginning after December 31,
2007, or before December 31, 2007 to the extent the credit is used
and at the rate at which the credit was used under former 1975 PA
228 or this act, calculate the gross proceeds or benefit derived
from the sale or other disposition of the tangible assets minus the
gain, multiplied by the apportionment factor for the taxable year
as prescribed in chapter 3, and plus the loss, multiplied by the
apportionment factor for the taxable year as prescribed in chapter
3 from the sale or other disposition reflected in federal taxable
income and minus the gain from the sale or other disposition added
to the business income tax base in section 201.
(e) If the cost of tangible assets described in subdivision
(b) was paid or accrued in a tax year beginning after December 31,
2007, or before December 31, 2007 to the extent the credit is used
and at the rate at which the credit was used under former 1975 PA
228 or this act, calculate the gross proceeds or benefit derived
from the sale or other disposition of the tangible assets minus the
gain and plus the loss from the sale or other disposition reflected
in federal taxable income and minus the gain from the sale or other
disposition added to the business income tax base in section 201.
This amount shall be multiplied by the apportionment factor for the
tax year as prescribed in chapter 3.
(f) For assets purchased or acquired in a tax year beginning
after December 31, 2007, or before December 31, 2007 to the extent
the credit is used and at the rate at which the credit was used
under former 1975 PA 228 or this act, that were eligible for a
credit under subdivision (a) or (c) and that were transferred out
of this state, calculate the federal basis used for determining
gain or loss as of the date of the transfer.
(4) For a tax year in which the amount of the credit
calculated under subsection (3) is negative, the absolute value of
that amount is added to the taxpayer's tax liability for the tax
year.
(5) A taxpayer that claims a credit under this section is not
prohibited from claiming a credit under section 405. However, the
taxpayer shall not claim a credit under this section and section
405 based on the same costs and expenses.
(6) For a taxpayer primarily engaged in furnishing electric
and gas utility service that makes capital investments in electric
and gas distribution assets for which a portion of the credit
provided under subsection (3) would be denied for the 2008 tax year
by reason of the 50% limitation of subsection (1), the 50%
limitation on the total combined credit for the 2008 tax year
provided in subsection (1) shall be increased by an amount not to
exceed the lesser of the amount of the denied credit or 50% of the
tax increase under this act accrued for financial reporting
purposes due to the elimination of the deduction under section
168(k)
of the internal revenue code by the amendatory act that
added
this subsection 2008 PA 434. Provided, however, that the
total combined credit allowed under this section for the 2008 tax
year shall not exceed 80% of the tax liability imposed under this
act after the imposition and levy of the surcharge under section
281.
Sec. 405. For the 2008 tax year, a taxpayer may claim a credit
against the tax imposed by this act equal to 1.52% of the
taxpayer's research and development expenses in this state in the
tax
year. For the 2009 tax year and each tax year after 2009 tax
years that begin after December 31, 2008, a taxpayer may claim a
House Bill No. 5384 as amended October 6, 2009
credit against the tax imposed by this act equal to 1.90% of the
taxpayer's research and development expenses in this state in the
tax year. The credit under this section combined with the total
combined credit allowed under section 403 shall not exceed 65% of
the tax liability imposed under this act before the imposition and
levy of the surcharge under section 281. As used in this section,
"research and development expenses" means that term as defined in
section 41(b) of the internal revenue code.
[Sec. 462. For tax years that begin after December 31, 2009, a
taxpayer that is a physician or physician entity that pays a quality assurance assessment levied under section 16302 of the public health code, 1978 PA 368, MCL 333.16302, may claim a credit against the tax levied under this act for the increase in taxes attributable to including the cost of medications administered either by injection or intravenously and purchased from other persons in calculating the tax base for the tax imposed under section 203. The amount of the credit shall not exceed the amount of the quality assurance assessment paid by the taxpayer during the tax year.]
