SENATE BILL No. 1056

 

 

January 23, 2008, Introduced by Senators PRUSI and CASSIS and referred to the Committee on Finance.

 

 

 

     A bill to amend 2007 PA 36, entitled

 

"Michigan business tax act,"

 

by amending section 115 (MCL 208.1115).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 115. (1) "Sale" or "sales" means, except as provided in

 

subdivision (e), the amounts received by the taxpayer as

 

consideration from the following:

 

     (a) The transfer of title to, or possession of, property that

 

is stock in trade or other property of a kind that would properly

 

be included in the inventory of the taxpayer if on hand at the

 

close of the tax period or property held by the taxpayer primarily

 

for sale to customers in the ordinary course of the taxpayer's

 

trade or business. For intangible property, the amounts received

 

shall be limited to any gain received from the disposition of that

 


property.

 

     (b) The performance of services that constitute business

 

activities.

 

     (c) The rental, lease, licensing, or use of tangible or

 

intangible property, including interest, that constitutes business

 

activity.

 

     (d) Any combination of business activities described in

 

subdivisions (a), (b), and (c).

 

     (e) For taxpayers not engaged in any other business

 

activities, sales include interest, dividends, and other income

 

from investment assets and activities and from trading assets and

 

activities.

 

     (2) "Shareholder" means a person who owns outstanding stock in

 

a business or is a member of a business entity that files as a

 

corporation for federal income tax purposes. An individual is

 

considered as the owner of the stock owned, directly or indirectly,

 

by or for family members as defined by section 318(a)(1) of the

 

internal revenue code.

 

     (3) "State" means any state of the United States, the District

 

of Columbia, the Commonwealth of Puerto Rico, any territory or

 

possession of the United States, and any foreign country, or a

 

political subdivision of any of the foregoing.

 

     (4) "Subchapter S corporation" means a corporation electing

 

taxation under subchapter S or chapter 1 of subtitle A of the

 

internal revenue code, sections 1361 to 1379 of the internal

 

revenue code.