HB-5011, As Passed Senate, February 13, 2014

SUBSTITUTE FOR

HOUSE BILL NO. 5011

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

by amending section 673 (MCL 206.673), as added by 2011 PA 181.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 673. (1) A taxpayer that has claimed a credit under

former 1975 PA 228 or under the Michigan business tax act, 2007 PA

36, MCL 208.1101 to 208.1601, that included a provision that

allowed for a reduction in the credit amount, a termination of the

credit, or a percentage of the credit amount previously claimed

added back to the tax liability of that taxpayer under that act if

the taxpayer failed to comply with any terms of the agreement or

other conditions of that credit or if the taxpayer sells or

otherwise moves the property for which a credit was claimed ~~less~~

fewer than 5 years after the year in which the credit was

originally claimed under former 1975 PA 228 or the Michigan

business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, shall have

a percentage, or the entire amount, of the credit amount previously

claimed under former 1975 PA 228 or the Michigan business tax act,

2007 PA 36, MCL 208.1101 to 208.1601, added back to the taxpayer's

tax liability under this act in the year that the taxpayer failed

to satisfy or breached the conditions of that credit set forth

under former 1975 PA 228 or the Michigan business tax act, 2007 PA

36, MCL 208.1101 to 208.1601.

(2) A taxpayer that has claimed a credit under section 35a of

former 1975 PA 228 or under section 403 of the Michigan business

tax act, 2007 PA 36, MCL 208.1403, for a tangible asset that the

taxpayer has sold, transferred out of this state, or otherwise

disposed of during the current tax year shall ~~to the extent the~~

~~credit was used, and at the rate at which the credit was used under~~

~~former 1975 PA 228 or at the rate at which the credit was used~~

~~under section 403 of the Michigan business tax act, 2007 PA 36, MCL~~

~~208.1403,~~ have an amount equal to the sum of the amounts calculated

under subdivisions (a), (b), and (c) added back to the taxpayer's

liability under this act for that same tax year:

(a) Calculate the gross proceeds or benefit derived from the

sale or other disposition of tangible assets, other than mobile

tangible assets, minus the gain, multiplied by the apportionment

factor for the taxable year as prescribed in chapter 14, and plus

the loss, multiplied by the apportionment factor for the taxable

year as prescribed in chapter 14 from the sale or other disposition

reflected in federal taxable income. ~~and minus the gain from the~~

~~sale or other disposition added to the corporate income tax base in~~

~~section 623.~~This amount shall be multiplied by the rate at which

the credit was used and to the extent the credit was used under

either former 1975 PA 228 or section 403 of the Michigan business

tax act, 2007 PA 36, MCL 208.1403, as applicable.

(b) Calculate the gross proceeds or benefit derived from the

sale or other disposition of mobile 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 corporate income tax base in section 623.~~

This amount shall be multiplied by the apportionment factor for the

tax year as prescribed in chapter 14. The resulting amount shall

then be multiplied by the rate at which the credit was used and to

the extent the credit was used under either former 1975 PA 228 or

section 403 of the Michigan business tax act, 2007 PA 36, MCL

208.1403, as applicable.

loss as of the date of the transfer of tangible assets, other than

mobile tangible assets, from this state. This amount shall be

multiplied by the rate at which the credit was used and to the

extent the credit was used under either former 1975 PA 228 or

section 403 of the Michigan business tax act, 2007 PA 36, MCL

208.1403, as applicable. For purposes of this subdivision, transfer

means removal from this state of tangible assets, other than mobile

tangible assets, by means other than sale or other disposition.

Enacting section 1. This amendatory act is retroactive and