Bill Text: MI SB0191 | 2009-2010 | 95th Legislature | Engrossed

---

Bill Title: Income tax; property tax credit; homestead property tax credit and income qualifier; increase. Amends secs. 520 & 522 of 1967 PA 281 (MCL 206.520 & 206.522).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2009-03-12 - Referred To Committee On Tax Policy [SB0191 Detail]

Download: Michigan-2009-SB0191-Engrossed.html

---

SB-0191, As Passed Senate, March 12, 2009

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

SENATE BILL NO. 191

 

 

 

 

 

 

 

 

 

 

 

      A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

by amending sections 520 and 522 (MCL 206.520 and 206.522),

 

section 520 as amended by 1995 PA 245 and section 522 as amended

 

by 2000 PA 41.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

 1        Sec. 520. (1) Subject to the limitations and the definitions

 

 2  in this chapter, a claimant may claim against the tax due under

 

 3  this act for the tax year a credit for the property taxes on the

 

 4  taxpayer's homestead deductible for federal income tax purposes

 

 5  pursuant to section 164 of the internal revenue code, or that

 

 6  would have been deductible if the claimant had not elected the

 

 7  zero bracket amount or if the claimant had been subject to the

 

 8  federal income tax. The property taxes used for the credit

 

 9  computation shall not be greater than the amount levied for 1 tax

 

 1  year.

 

 2        (2) A person who rents or leases a homestead may claim a

 

 3  similar credit computed under this section and section 522 based

 

 4  upon 17% of the gross rent paid for tax years before the 1994 tax

 

 5  year, or 20% of the gross rent paid for tax years after the 1993

 

 6  tax year. A person who rents or leases a homestead subject to a

 

 7  service charge in lieu of ad valorem taxes as provided by section

 

 8  15a of the state housing development authority act of 1966, Act

 

 9  No. 346 of the Public Acts of 1966, being section 125.1415a of

 

10  the Michigan Compiled Laws 1966 PA 346, MCL 125.1415a, may claim

 

11  a similar credit computed under this section and section 522

 

12  based upon 10% of the gross rent paid.

 

13        (3) If the credit claimed under this section and section 522

 

14  exceeds the tax liability for the tax year or if there is no tax

 

15  liability for the tax year, the amount of the claim not used as

 

16  an offset against the tax liability shall, after examination and

 

17  review, be approved for payment, without interest, to the

 

18  claimant. In determining the amount of the payment under this

 

19  subsection, withholdings and other credits shall be used first to

 

20  offset any tax liabilities.

 

21        (4) If the homestead is an integral part of a multipurpose

 

22  or multidwelling building that is federally aided housing or

 

23  state aided housing, a claimant who is a senior citizen entitled

 

24  to a payment under subsection (2) may assign the right to that

 

25  payment to a mortgagor if the mortgagor reduces the rent charged

 

26  and collected on the claimant's homestead in an amount equal to

 

27  the tax credit payment provided in this chapter. The assignment

 

 1  of the claim is valid only if the Michigan state housing

 

 2  development authority, by affidavit, verifies that the claimant's

 

 3  rent has been so reduced.

 

 4        (5) Only the renter or lessee shall claim a credit on

 

 5  property that is rented or leased as a homestead.

 

 6        (6) A person who discriminates in the charging or collection

 

 7  of rent on a homestead by increasing the rent charged or

 

 8  collected because the renter or lessee claims and receives a

 

 9  credit or payment under this chapter is guilty of a misdemeanor.

 

10  Discrimination against a renter who claims and receives the

 

11  credit under this section and section 522 by a reduction of the

 

12  rent on the homestead of a person who does not claim and receive

 

13  the credit is a misdemeanor. If discriminatory rents are charged

 

14  or collected, each charge or collection of the higher or lower

 

15  payment is a separate offense. Each acceptance of a payment of

 

16  rent is a separate offense.

 

17        (7) A person who received aid to families with dependent

 

18  children, state family assistance, or state disability assistance

 

19  through department of human services programs pursuant to the

 

20  social welfare act, Act No. 280 of the Public Acts of 1939, as

 

21  amended, being sections 400.1 to 400.119b of the Michigan

 

22  Compiled Laws 1939 PA 280, MCL 400.1 to 400.119b, in the tax year

 

23  for which the person is filing a return shall have a credit that

 

24  is authorized and computed under this section and section 522

 

25  reduced by an amount equal to the product of the claimant's

 

26  credit multiplied by the quotient of the sum of the claimant's

 

27  aid to families with dependent children, state family assistance,

 

 1  and state disability assistance through department of human

 

 2  services programs pursuant to the social welfare act, 1939 PA

 

 3  280, MCL 400.1 to 400.119b, for the tax year divided by the

 

 4  claimant's household income. The reduction of credit shall not

 

 5  exceed the sum of the aid to families with dependent children,

 

 6  state family assistance, and state disability assistance through

 

 7  department of human services programs pursuant to the social

 

 8  welfare act, 1939 PA 280, MCL 400.1 to 400.119b, for the tax

 

 9  year. For the purposes of this subsection, aid to families with

 

10  dependent children any assistance through department of human

 

11  services programs does not include child support payments that

 

12  offset or reduce payments made to the claimant.

 

13        (8) A For tax years that begin before January 1, 2009, a

 

14  credit under subsection (1) or (2) shall be reduced by 10% for

 

15  each claimant whose household income exceeds $73,650.00 and by an

 

16  additional 10% for each increment of $1,000.00 of household

 

17  income in excess of $73,650.00. For tax years that begin on or

 

18  after January 1, 2009, a credit under subsection (1) or (2) shall

 

19  be reduced by 10% for each claimant whose household income

 

20  exceeds $83,650.00 and by an additional 10% for each increment of

 

21  $1,000.00 of household income in excess of $83,650.00. For the

 

22  tax years that begin after December 31, 2009, the maximum amount

 

23  allowed under this subsection shall be adjusted by the percentage

 

24  increase in the United States consumer price index for the

 

25  immediately preceding calendar year. The department shall

 

26  annualize the amounts provided in this subsection as necessary.

 

27  As used in this subsection, "United States consumer price index"

 

 1  means the United States consumer price index for all urban

 

 2  consumers as defined and reported by the United States department

 

 3  of labor, bureau of labor statistics.

 

 4        (9) If the credit authorized and calculated under this

 

 5  section and section 522 and adjusted under subsection (7) or (8)

 

 6  does not provide to a senior citizen who rents or leases a

 

 7  homestead that amount attributable to rent that constitutes more

 

 8  than 40% of the household income of the senior citizen, the

 

 9  senior citizen may claim a credit based upon the amount of

 

10  household income attributable to rent as provided by this

 

11  section.

 

12        (10) A senior citizen whose gross rent paid for the tax year

 

13  is more than the percentage of household income specified in

 

14  subsection (9) for the respective tax year may claim a credit for

 

15  the amount of rent paid that constitutes more than the percentage

 

16  of the household income of the senior citizen specified in

 

17  subsection (9) and that was not provided to the senior citizen by

 

18  the credit computed pursuant to this section and section 522 and

 

19  adjusted pursuant to subsection (7) or (8).

 

20        (11) The department may promulgate rules to implement

 

21  subsections (9) to (16) (14) and may prescribe a table to allow a

 

22  claimant to determine the credit provided under this section and

 

23  section 522 in the instruction booklet that accompanies the

 

24  respective income tax or property tax credit forms used by

 

25  claimants.

 

26        (12) A senior citizen may claim the credit under subsections

 

27  (9) to (16) (14) on the same form as the property tax credit

 

 1  permitted by subsection (2). The department shall adjust the

 

 2  forms accordingly.

 

 3        (13) A senior citizen who moves to a different rented or

 

 4  leased homestead shall determine, for 2 tax years after the move,

 

 5  both his or her qualification to claim a credit under subsections

 

 6  (9) to (16) (14) and the amount of a credit under subsections (9)

 

 7  to (16) (14) on the basis of the annualized final monthly rental

 

 8  payment at his or her previous homestead, if this annualized

 

 9  rental is less than the senior citizen's actual annual rental

 

10  payments.

 

11        (14) For a return of less than 12 months, the claim for a

 

12  credit under subsections (9) to (16) (13) shall be reduced

 

13  proportionately.

 

14        (15) The Michigan state housing development authority shall

 

15  report on the effect of the credit provided by subsections (9) to

 

16  (16) (14) on the price of rented and leased homesteads. If the

 

17  authority determines that the price of rented and leased

 

18  homesteads has increased as a result of the credit provided by

 

19  subsections (9) to (16) (14), the authority shall make

 

20  recommendations to the legislature to remedy this situation. The

 

21  report shall be made to the chairpersons of the house and senate

 

22  committees that have primary responsibility for taxation

 

23  legislation 2 years after the credit provided by subsections (9)

 

24  to (16) (14) is in effect.

 

25        (16) The Except as otherwise provided under subsection (17),

 

26  the total credit allowed by this section and section 522 shall

 

27  not exceed $1,200.00 per year for tax years that begin before

 

 1  January 1, 2009 and $1,300.00 for tax years that begin after

 

 2  December 31, 2008. For the tax years that begin after December

 

 3  31, 2009, the maximum amount allowed under this subsection shall

 

 4  be adjusted by the percentage increase in the United States

 

 5  consumer price index for the immediately preceding calendar year.

 

 6  The department shall annualize the amounts provided in this

 

 7  subsection as necessary. As used in this subsection, "United

 

 8  States consumer price index" means the United States consumer

 

 9  price index for all urban consumers as defined and reported by

 

10  the United States department of labor, bureau of labor

 

11  statistics.

 

12        (17) A senior citizen and a person who is totally and

 

13  permanently disabled as defined in section 522 is allowed an

 

14  additional $50.00 credit under this section.

 

15        Sec. 522. (1) The amount of a claim made pursuant to this

 

16  chapter shall be determined as follows:

 

17        (a) A claimant is entitled to a credit against the state

 

18  income tax liability equal to 60% of the amount by which the

 

19  property taxes on the homestead, or the credit for rental of the

 

20  homestead for the tax year, exceeds 3.5% of the claimant's

 

21  household income for that tax year.

 

22        (b) A claimant who is a senior citizen or a paraplegic,

 

23  hemiplegic, or quadriplegic and for tax years that begin after

 

24  December 31, 1999, a claimant who is totally and permanently

 

25  disabled or deaf is entitled to a credit against the state income

 

26  tax liability for the amount by which the property taxes on the

 

27  homestead, the credit for rental of the homestead, or a service

 

 1  charge in lieu of ad valorem taxes as provided by section 15a of

 

 2  the state housing development authority act of 1966, 1966 PA 346,

 

 3  MCL 125.1415a, for the tax year exceeds the percentage of the

 

 4  claimant's household income for that tax year computed as

 

 5  follows:

 

 

6	Household income                   Percentage
7	Not over $3,000.00                                .0%
8	Over $3,000.00 but not over $4,000.00            1.0%
9	Over $4,000.00 but not over $5,000.00            2.0%
10	Over $5,000.00 but not over $6,000.00            3.0%
11	Over $6,000.00                                   3.5%

 

 

12        (c) For a tax year that begins before January 1, 2000, a

 

13  claimant who is totally and permanently disabled is entitled to a

 

14  credit against the state income tax liability equal to 60% of the

 

15  amount by which the property taxes on the homestead, or the

 

16  credit for rental of the homestead or for a service charge in

 

17  lieu of ad valorem taxes as provided in section 15a of the state

 

18  housing development authority act of 1966, 1966 PA 346, MCL

 

19  125.1415a, for the tax year, exceeds the percentage of the

 

20  claimant's household income for that tax year based on the

 

21  schedule in subdivision (b).

 

22        (d) A claimant who is an eligible serviceperson, eligible

 

23  veteran, or eligible widow or widower is entitled to a credit

 

24  against the state income tax liability for a percentage of the

 

25  property taxes on the homestead for the tax year not in excess of

 

26  100% determined as follows:

 

 1        (i) Divide the taxable value allowance specified in section

 

 2  506 by the taxable value of the homestead or, if the eligible

 

 3  serviceperson, eligible veteran, or eligible widow or widower

 

 4  leases or rents a homestead, divide 17% of the total annual rent

 

 5  paid for tax years before the 1994 tax year, or 20% of the total

 

 6  annual rent paid for tax years after the 1993 tax year on the

 

 7  property by the property tax rate on the property.

 

 8        (ii) Multiply the property taxes on the homestead by the

 

 9  percentage computed in subparagraph (i).

 

10        (e) A claimant who is blind is entitled to a credit against

 

11  the state income tax liability for a percentage of the property

 

12  taxes on the homestead for the tax year determined as follows:

 

13        (i) If the taxable value of the homestead is $3,500.00 or

 

14  less, 100% of the property taxes.

 

15        (ii) If the taxable value of the homestead is more than

 

16  $3,500.00, the percentage that $3,500.00 bears to the taxable

 

17  value of the homestead.

 

18        (2) A person who is qualified to make a claim under more

 

19  than 1 classification shall elect the classification under which

 

20  the claim is made.

 

21        (3) Only 1 claimant per household for a tax year is entitled

 

22  to the credit, unless both the husband and wife filing a joint

 

23  return are blind, then each shall be considered a claimant.

 

24        (4) As used in this section, "totally and permanently

 

25  disabled" means disability as defined in section 216 of title II

 

26  of the social security act, 42 U.S.C. USC 416.

 

27        (5) A senior citizen who has a total household income for

 

 1  the tax year of $6,000.00 or less and who for 1973 received a

 

 2  senior citizen homestead exemption under former section 7c of the

 

 3  general property tax act, Act No. 206 of the Public Acts of 1893

 

 4  1893 PA 206, may compute the credit against the state income tax

 

 5  liability for a percentage of the property taxes on the homestead

 

 6  for the tax year determined as follows:

 

 7        (a) If the taxable value of the homestead is $2,500.00 or

 

 8  less, 100% of the property taxes.

 

 9        (b) If the taxable value of the homestead is more than

 

10  $2,500.00, the percentage that $2,500.00 bears to the taxable

 

11  value of the homestead.

 

12        (6) For a return of less than 12 months, the claim shall be

 

13  reduced proportionately.

 

14        (7) The commissioner may prescribe tables that may be used

 

15  to determine the amount of the claim.

 

16        (8) The total credit allowed in this section for each year

 

17  after December 31, 1975 shall not exceed $1,200.00 per year the

 

18  amount determined under section 520.

 

19        (9) The total credit allowable under this act and part 361

 

20  of the natural resources and environmental protection act, 1994

 

21  PA 451, MCL 324.36101 to 324.36117, shall not exceed the total

 

22  property tax due and payable by the claimant in that year. The

 

23  amount by which the credit exceeds the property tax due and

 

24  payable shall be deducted from the credit claimed under part 361

 

25  of the natural resources and environmental protection act, 1994

 

26  PA 451, MCL 324.36101 to 324.36117.