Bill Text: MI HB4857 | 2017-2018 | 99th Legislature | Introduced


Bill Title: Individual income tax; property tax credit; inflation adjustment of cap on the credit; begin 2019. Amends sec. 520 of 1967 PA 281 (MCL 206.520).

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2017-08-16 - Bill Electronically Reproduced 07/12/2017 [HB4857 Detail]

Download: Michigan-2017-HB4857-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4857

 

 

July 12, 2017, Introduced by Rep. Tedder and referred to the Committee on Tax Policy.

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

by amending section 520 (MCL 206.520), as amended by 2015 PA 179.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

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

 

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

 

this part for the tax year a credit for the property taxes on the

 

taxpayer's homestead deductible for federal income tax purposes

 

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

 

have been deductible if the claimant had not elected the zero

 

bracket amount or if the claimant had been subject to the federal

 

income tax. The property taxes used for the credit computation

 

shall not be greater than the amount levied for 1 tax year. An

 

owner is not eligible for a credit under this section if the

 


taxable value of his or her homestead excluding the portion of a

 

parcel of real property that is unoccupied and classified as

 

agricultural for ad valorem tax purposes in the year for which the

 

credit is claimed is greater than $135,000.00 through the 2021 tax

 

year. Beginning with the 2021 tax year and each tax year after

 

2021, the taxable value cap under this subsection for the

 

immediately preceding tax year shall be adjusted by the percentage

 

increase in the United States consumer price index for the

 

immediately preceding calendar year and rounded to the nearest

 

$100.00 increment. The department shall annualize the amount in

 

this subsection as necessary. As used in this subsection, "taxable

 

value" means that value determined under section 27a of the general

 

property tax act, 1893 PA 206, MCL 211.27a.

 

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

 

similar credit computed under this section and section 522 based

 

upon 20% of the gross rent paid for tax years before the 2018 tax

 

year or 23% of the gross rent paid for tax years after the 2017 tax

 

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

 

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

 

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

 

MCL 125.1415a, may claim a similar credit computed under this

 

section and section 522 based upon 10% of the gross rent paid.

 

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

 

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

 

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

 

offset against the tax liability shall, after examination and

 

review, be approved for payment, without interest, to the claimant.


In determining the amount of the payment under this subsection,

 

withholdings and other credits shall be used first to offset any

 

tax liabilities.

 

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

 

multidwelling building that is federally aided housing or state

 

aided housing, a claimant who is a senior citizen entitled to a

 

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

 

to a mortgagor if the mortgagor reduces the rent charged and

 

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

 

credit payment provided in this chapter. The assignment of the

 

claim is valid only if the Michigan state housing development

 

authority, by affidavit, verifies that the claimant's rent has been

 

so reduced.

 

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

 

that is rented or leased as a homestead.

 

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

 

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

 

because the renter or lessee claims and receives a credit or

 

payment under this chapter is guilty of a misdemeanor.

 

Discrimination against a renter who claims and receives the credit

 

under this section and section 522 by a reduction of the rent on

 

the homestead of a person who does not claim and receive the credit

 

is a misdemeanor. If discriminatory rents are charged or collected,

 

each charge or collection of the higher or lower payment is a

 

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

 

separate offense.

 

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


children, state family assistance, or state disability assistance

 

pursuant to the social welfare act, 1939 PA 280, MCL 400.1 to

 

400.119b, in the tax year for which the person is filing a return

 

shall have a credit that is authorized and computed under this

 

section and section 522 reduced by an amount equal to the product

 

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

 

the claimant's aid to families with dependent children, state

 

family assistance, and state disability assistance for the tax year

 

divided by the claimant's total household resources. The reduction

 

of credit shall not exceed the sum of the aid to families with

 

dependent children, state family assistance, and state disability

 

assistance for the tax year. For the purposes of this subsection,

 

aid to families with dependent children does not include child

 

support payments that offset or reduce payments made to the

 

claimant.

 

     (8) For tax years before the 2018 tax year, a credit under

 

subsection (1) or (2) shall be reduced by 10% for each claimant

 

whose total household resources exceed the minimum total household

 

resources amount of $41,000.00 and by an additional 10% for each

 

increment of $1,000.00 of total household resources in excess of

 

$41,000.00. Except as otherwise provided under this subsection, for

 

the 2018 tax year and each tax year after 2018, the minimum total

 

household resources amount is $51,000.00. For the 2018 tax year and

 

each tax year after 2018, a credit under subsection (1) or (2)

 

shall be reduced by 10% for each claimant whose total household

 

resources exceed the minimum total household resources amount

 

established under this subsection and by an additional 10% for each


increment of $1,000.00 of total household resources in excess of

 

the minimum total household resources amount for that tax year. For

 

the 2021 tax year and each tax year after 2021, the minimum total

 

household resources threshold amount established under this

 

subsection for the immediately preceding tax year shall be adjusted

 

by the percentage increase in the United States consumer price

 

index for the immediately preceding calendar year and rounded to

 

the nearest $100.00 increment.

 

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

 

and section 522 and adjusted under subsection (7) or (8) does not

 

provide to a senior citizen who rents or leases a homestead that

 

amount attributable to rent that constitutes more than 40% of the

 

total household resources of the senior citizen, the senior citizen

 

may claim a credit based upon the amount of total household

 

resources attributable to rent as provided by this section.

 

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

 

is more than the percentage of total household resources specified

 

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

 

for the amount of rent paid that constitutes more than the

 

percentage of the total household resources of the senior citizen

 

specified in subsection (9) and that was not provided to the senior

 

citizen by the credit computed pursuant to this section and section

 

522 and adjusted pursuant to subsection (7) or (8).

 

     (11) The department may promulgate rules to implement

 

subsections (9) to (15) and may prescribe a table to allow a

 

claimant to determine the credit provided under this section and

 

section 522 in the instruction booklet that accompanies the


respective income tax or property tax credit forms used by

 

claimants.

 

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

 

(9) to (15) on the same form as the property tax credit permitted

 

by subsection (2). The department shall adjust the forms

 

accordingly.

 

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

 

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

 

both his or her qualification to claim a credit under subsections

 

(9) to (15) and the amount of a credit under subsections (9) to

 

(15) on the basis of the annualized final monthly rental payment at

 

his or her previous homestead, if this annualized rental is less

 

than the senior citizen's actual annual rental payments.

 

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

 

credit under subsections (9) to (15) shall be reduced

 

proportionately.

 

     (15) For tax years before the 2018 tax year, the total credit

 

allowed by this section and section 522 shall not exceed $1,200.00

 

per year. Except as otherwise provided under this subsection, for

 

For the 2018 tax year, and each tax year after 2018, the total

 

credit allowed by this section and section 522 shall not exceed

 

$1,500.00 per year. Beginning with the 2021 2019 tax year and each

 

tax year after 2021, 2019, the maximum amount of the credit allowed

 

under this section and section 522 for the immediately preceding

 

tax year shall be adjusted by the percentage increase in the United

 

States consumer price index for the immediately preceding calendar

 

year. The department shall round the amount to the nearest $100.00


increment.

 

     (16) As used in this section, "United States consumer price

 

index" means the United States consumer price index for all urban

 

consumers as defined and reported by the United States Department

 

of Labor, Bureau of Labor Statistics.

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