Bill Text: MI HB4950 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Corporate income tax; insurance companies; tax imposed on gross direct premiums; exclude health maintenance organizations. Amends sec. 635 of 1967 PA 281 (MCL 206.635).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-02-22 - Assigned Pa 31'18 With Immediate Effect [HB4950 Detail]
Download: Michigan-2017-HB4950-Engrossed.html
HB-4950, As Passed Senate, February 6, 2018
HOUSE BILL No. 4950
September 13, 2017, Introduced by Rep. Vaupel and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending section 635 (MCL 206.635), as added by 2011 PA 38.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 635. (1) Except as otherwise provided under subsection
(4) or (6), each insurance company shall pay a tax determined under
this chapter.
(2) The tax imposed by this chapter on each insurance company
shall be a tax equal to 1.25% of gross direct premiums written on
property or risk located or residing in this state. Direct premiums
do not include any of the following:
(a) Premiums on policies not taken.
(b) Returned premiums on canceled policies.
(c) Receipts from the sale of annuities.
(d) Receipts on reinsurance premiums if the tax has been paid
on the original premiums.
(e) The first $190,000,000.00 of disability insurance premiums
written in this state, other than credit insurance and disability
income insurance premiums, of each insurance company subject to tax
under this chapter. This exemption shall be reduced by $2.00 for
each $1.00 by which the insurance company's gross direct premiums
from insurance carrier services in this state and outside this
state exceed $280,000,000.00.
(3) The tax calculated under this chapter is in lieu of all
other privilege or franchise fees or taxes imposed by this part or
any other law of this state, except taxes on real and personal
property, taxes collected under the general sales tax act, 1933 PA
167, MCL 205.51 to 205.78, and taxes collected under the use tax
act, 1937 PA 94, MCL 205.91 to 205.111, and except as otherwise
provided in the insurance code of 1956, 1956 PA 218, MCL 500.100 to
500.8302.
(4) The tax imposed and levied under this chapter does not
apply to an insurance company authorized under chapter 46 or 47 of
the insurance code of 1956, 1956 PA 218, MCL 500.4601 to 500.4673
and 500.4701 to 500.4747.
(5) For a taxpayer subject to the tax imposed under chapter
11, that portion of the tax base attributable to the services
provided by an attorney-in-fact to a reciprocal insurer pursuant to
chapter 72 of the insurance code of 1956, 1956 PA 218, MCL 500.7200
to 500.7234, is exempt from the tax imposed by that chapter.
(6) The tax imposed and levied under this chapter does not
apply to a health maintenance organization authorized under chapter
35 of the insurance code of 1956, 1956 PA 218, MCL 500.3501 to
500.3573.
Enacting section 1. This amendatory act is retroactive and
effective for tax years that begin on and after January 1, 2016.
