HOUSE BILL No. 5281


     October 15, 1997, Introduced by Rep. Scranton and referred to the Committee on Tax Policy.


        A bill to amend 1975 PA 228, entitled

   "Single business tax act,"

   by amending section 4 (MCL 208.4), as amended by 1995 PA 285.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 4.  (1) "Casual transaction" means a transaction made

 2    or engaged in other than in the ordinary course of repeated and

 3    successive transactions of a like character, except that a trans-

 4    action made or engaged in by a person that is incidental to that

 5    person's regular business activity is a business activity within

 6    the meaning of this act.

 7         (2) "Commissioner" means the state commissioner of revenue.

 8         (3) Except as otherwise provided in this section,

 9    "compensation" means all wages, salaries, fees, bonuses,

10    commissions, or other payments made in the taxable year on behalf

11    of or for the benefit of employees, officers, or directors of the


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 1    taxpayers and subject to or specifically exempt from withholding

 2    under chapter 24, sections 3401 to 3406 of the internal revenue

 3    code.  Compensation includes, on a cash or accrual basis consis-

 4    tent with the taxpayer's method of accounting for federal income

 5    tax purposes, payments to state and federal unemployment compen-

 6    sation funds, payments under the federal insurance contribution

 7    act and similar social insurance programs, payments, including

 8    self-insurance, for worker's compensation insurance, payments to

 9    individuals not currently working, payments to dependents and

10    heirs of individuals because of current or former labor services

11    rendered by those individuals, payments to a pension, retirement,

12    or profit sharing plan, and payments for insurance for which

13    employees are the beneficiaries, including payments under health

14    and welfare and noninsured benefit plans and payments of fees for

15    the administration of health and welfare and noninsured benefit

16    plans.  Compensation does not include any of the following:

17         (a) Discounts on the price of the taxpayer's merchandise or

18    services sold to the taxpayer's employees, officers, or directors

19    that are not available to other customers.

20         (b) Payments to an independent contractor.

21         (c) For tax years beginning after December 31, 1994, pay-

22    ments to state and federal unemployment compensation funds.

23         (d) For tax years beginning after December 31, 1994, the

24    employer's portion of payments under the federal insurance

25     contribution  CONTRIBUTIONS act, CHAPTER 21 OF THE INTERNAL REV-

26    ENUE CODE, 26 U.S.C. 3101 TO 3128, the railroad retirement tax

27    act, chapter 22 of  title 26 of the United States Code  THE



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 1    INTERNAL REVENUE CODE, 26 U.S.C. 3201 to 3233, and similar social

 2    insurance programs.

 3         (e) For tax years beginning after December 31, 1994, pay-

 4    ments, including self-insurance payments, for worker's compensa-

 5    tion insurance or federal employers liability act insurance pur-

 6    suant to chapter 149, 35 Stat. 65, 45 U.S.C. 51 to 60.

 7         (F) FOR TAX YEARS BEGINNING AFTER DECEMBER 31, 1997, PAY-

 8    MENTS UNDER HEALTH AND WELFARE AND NONINSURED BENEFIT PLANS AND

 9    PAYMENTS OF FEES FOR THE ADMINISTRATION OF HEALTH AND WELFARE AND

10    NONINSURED BENEFIT PLANS.

11         (4) "Department" means the revenue division of the depart-

12    ment of treasury.
































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