April 8, 2008, Introduced by Reps. Clemente, Byrnes, Mayes, Tobocman, Huizenga, Griffin, Robert Jones, Bauer, Warren, Sak, Moss, Brown, Alma Smith, Coulouris and Dean and referred to the Committee on New Economy and Quality of Life.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
(MCL 208.1101 to 208.1601) by adding sections 461, 462, and 463.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 461. (1) For tax years that begin after December 31,
2008, a taxpayer may claim a credit against the tax imposed by this
act equal to the amount determined by the cultural redevelopment
district authority for projects located in a cultural redevelopment
district that have been approved by the cultural redevelopment
authority board that are part of the application submitted by a
qualified local governmental unit in which the project will be
developed.
(2) A taxpayer shall apply to the cultural redevelopment
authority board for approval of a project under this section. The
cultural redevelopment authority board is authorized to approve or
deny an application. A project shall be approved or denied not more
than 45 days after receipt of the application. If the cultural
redevelopment authority board does not approve or deny an
application within 45 days after the application is received by the
cultural redevelopment authority board, the application is
considered approved as written. If the cultural redevelopment
authority board approves a project, the cultural redevelopment
authority board shall issue an approval letter that states that the
taxpayer qualifies for the credit under this section and the amount
of the credit that the taxpayer may claim for the project. If an
application is denied, a taxpayer is not prohibited from
subsequently applying for the same project or for another project.
A taxpayer and assignees under subsection (5) that claim a credit
under this section shall attach a copy of the approval letter to
the annual return filed under this act on which the credit is
claimed.
(3) The total of all credits for all projects approved under
this section shall not exceed $1,000,000.00 in any calendar year.
(4) The credit for each project approved under this section
shall not exceed $250,000.00.
(5) A taxpayer may assign all or a portion of a credit allowed
under this section. A credit assignment under this subsection is
irrevocable and shall be made in the tax year in which the project
is completed. A taxpayer may claim a portion of a credit and assign
the remaining credit amount. If the taxpayer both claims and
assigns portions of the credit, the taxpayer shall claim the
portion it claims in the tax year in which the project is
completed. An assignee may subsequently assign a credit or any
portion of a credit assigned under this section to 1 or more
assignees. The credit assignment or a subsequent reassignment under
this section shall be made on a form prescribed by the cultural
redevelopment district authority. The taxpayer shall send a copy of
the completed assignment form to the cultural redevelopment
district authority in the tax year in which an assignment or
reassignment is made. An assignee or subsequent reassignee shall
attach a copy of the completed assignment form to its annual return
required under this act, for the tax year in which the assignment
or reassignment is made and the assignee or reassignee first claims
a credit, which shall be the same tax year.
(6) If the credit allowed under this section for the tax year
and any unused carryforward of the credit allowed under this
section exceed the tax liability of the taxpayer for the tax year,
the excess shall not be refunded, but may be carried forward as an
offset to the tax liability in subsequent tax years for 10 tax
years or until the excess credit is used up, whichever occurs
first.
(7) As used in this section:
(a) "Artist", "artistic work", "cultural redevelopment
district authority", "cultural redevelopment district authority
board", "cultural redevelopment district", and "qualified local
governmental unit" mean those terms as defined in the cultural
redevelopment district authority act.
(b) "Project" means any development project within the
cultural redevelopment district.
Sec. 462. (1) For tax years that begin after December 31,
2008, a taxpayer may claim a credit against the tax imposed by this
act equal to the sum of the following:
(a) The amount of property taxes levied against the taxpayer's
property that is rented to a person who is an artist and who lives
in the property or that is used to create, sell, or display
artistic work multiplied first by the percentage in subparagraph (i)
and then multiplied by the fraction determined under subparagraph
(ii):
(i) The percentage of the total area of the taxpayer's property
that is rented to the artist.
(ii) A fraction, the numerator of which is the number of days
during the tax year that the taxpayer's property is rented to an
artist and the denominator of which is 365.
(b) The amount of property taxes levied against the taxpayer's
property that is lived in by the taxpayer who is an artist and is
used by the taxpayer to create or is used to display artistic work
multiplied first by the percentage in subparagraph (i) and then
multiplied by the fraction determined under subparagraph (ii):
(i) The percentage of the total area of the taxpayer's property
that is lived in by the taxpayer who is an artist and is used by
the taxpayer to create or display artistic work.
(ii) A fraction, the numerator of which is the number of days
during the tax year that the taxpayer's property is rented to an
artist and the denominator of which is 365.
(2) A taxpayer may claim the credit under subsection (1)(a) if
all of the following apply:
(a) The artist creates artistic work while residing at the
taxpayer's property.
(b) The taxpayer's property is located in a cultural
redevelopment district in this state.
(c) The taxpayer has applied to the cultural redevelopment
district authority for the cultural redevelopment district in which
the property is located and the authority certifies that the
taxpayer is eligible.
(3) The credit is equal to the following percentage of the
total amount determined under subsection (1):
(a) Eighty percent for the first 5 tax years.
(b) Seventy percent for the sixth tax year.
(c) Sixty percent for the seventh tax year.
(d) Fifty percent for the eighth tax year.
(e) Forty percent for the ninth tax year.
(f) Thirty percent for the tenth tax year.
(g) Zero percent for each year after the tenth tax year.
(4) If the taxpayer's property contains multiple units, the
credit shall be prorated to include only that portion of the
property taxes attributable to the units or portions of units
rented to 1 or more artists or used to create or display artistic
work.
(5) A taxpayer may assign all or a portion of a credit allowed
under this section. A credit assignment under this subsection is
irrevocable and shall be made in the tax year in which the project
is completed. A taxpayer may claim a portion of a credit and assign
the remaining credit amount. If the taxpayer both claims and
assigns portions of the credit, the taxpayer shall claim the
portion it claims in the tax year in which the project is
completed. An assignee may subsequently assign a credit or any
portion of a credit assigned under this section to 1 or more
assignees. The credit assignment or a subsequent reassignment under
this section shall be made on a form prescribed by the cultural
redevelopment district authority. The taxpayer shall send a copy of
the completed assignment form to the cultural redevelopment
district authority in the tax year in which an assignment or
reassignment is made. An assignee or subsequent reassignee shall
attach a copy of the completed assignment form to its annual return
required under this act, for the tax year in which the assignment
or reassignment is made and the assignee or reassignee first claims
a credit, which shall be the same tax year.
(6) If the credit allowed under this section for the tax year
and any unused carryforward of the credit allowed by this section
exceed the taxpayer's tax liability for the tax year, that portion
that exceeds the tax liability for the tax year shall not be
refunded but may be carried forward to offset tax liability in
subsequent years for 10 years or until used up, whichever occurs
first.
(7) As used in this section and section 463:
(a) "Artist" and "artistic work" mean those terms as defined
in the cultural redevelopment district authority act.
(b) "Authority" or "cultural redevelopment district authority"
means an authority created in the cultural redevelopment district
authority act.
(c) "Cultural redevelopment district" means a district as that
term is defined in the cultural redevelopment district authority
act.
(d) "Property taxes" means that term as defined in section 512
of the income tax act of 1967, 1967 PA 281, MCL 206.512.
Sec. 463. (1) For tax years that begin after December 31,
2008, a taxpayer may claim a credit against the tax imposed by this
act equal to the contributions made in the tax year to a qualified
nonprofit organization located within or conducting business in a
cultural redevelopment district.
(2) A credit under this section shall not exceed $5,000.00 or
5% of the taxpayer's tax liability for the tax year, whichever is
less.
(3) A contribution used to calculate a credit under this
section shall not be used to calculate a credit under any other
section of this act or under the income tax act of 1967, 1967 PA
281, MCL 206.1 to 206.532.
(4) 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 be
refunded.
(5) As used in this section, "qualified nonprofit
organization" means an entity that is exempt from taxation under
section 501(c)(3) of the internal revenue code and the primary
purpose of which is to promote the creation, distribution, and
marketing of artistic works or arts education.