Bill Text: MI HB5122 | 2011-2012 | 96th Legislature | Engrossed

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Bill Title: Income tax; deductions; income earned or received by certain taxpayers located within a renaissance zone; allow. Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 31a.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2012-01-17 - Referred To Committee On Finance [HB5122 Detail]

Download: Michigan-2011-HB5122-Engrossed.html

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HB-5122, As Passed House, December 8, 2011

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 5122

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

(MCL 206.1 to 206.713) by adding section 31a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 31a. (1) Notwithstanding any other provision of this act

 

and for the 2012 tax year and each tax year after 2012, "taxable

 

income" means taxable income as determined under section 30 and,

 

except as otherwise provided, subsequently adjusted under this

 

section.

 

     (2) For the 2012 tax year and each tax year after 2012 and to

 

the extent and for the duration provided in the Michigan

 

renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, to

 

determine taxable income, a qualified taxpayer may deduct, to the

 

extent included in adjusted gross income, an amount equal to the

 

sum of all of the following:

 

     (a) Except as provided in subdivisions (b), (c), and (d),

 

income earned or received during the period of time that the

 

qualified taxpayer was a resident of a qualified renaissance zone.

 

     (b) Interest and dividends received in the tax year during the

 

period that the qualified taxpayer was a resident of a qualified

 

renaissance zone.

 

     (c) Capital gains received in the tax year prorated based on

 

the percentage of time that the asset was held by the qualified

 

taxpayer while the qualified taxpayer was a resident of the

 

qualified renaissance zone.

 

     (d) Income received by the qualified taxpayer from winning an

 

on-line lottery game sponsored by this state only if the date on

 

which the drawing for that game was held was after the taxpayer

 

became a resident of a qualified renaissance zone and income

 

received by the qualified taxpayer from winning an instant lottery

 

game sponsored by this state only if the taxpayer was a resident of

 

a qualified renaissance zone on the validation date of the lottery

 

ticket for that game.

 

     (3) Income used to calculate a deduction under any other

 

section of this act shall not be used to calculate a deduction

 

under this section.

 

     (4) If a qualified taxpayer completes the residency

 

requirements under subsection (11)(e), the qualified taxpayer may

 

claim the deduction allowed under this section.

 

     (5) To be eligible for the deduction under this section, a

 

taxpayer shall file an annual return under this act.

 

     (6) A qualified taxpayer shall file a withholding form

 

prescribed by the department with his or her employer within 10

 

days after the date the taxpayer completes the requirements under

 

subsection (11)(e).

 

     (7) If the department finds that a taxpayer has claimed a

 

deduction under this section to which he or she is not entitled,

 

the taxpayer is subject to the interest and penalty provisions

 

under 1941 PA 122, MCL 205.1 to 205.31.

 

     (8) Any portion of taxable income derived from illegal

 

activity conducted anywhere shall not be used to calculate a

 

deduction under this section.

 

     (9) The net operating loss deduction allowed under section

 

30(1)(n) shall be calculated without regard to the deductions

 

allowed under this section.

 

     (10) If a taxpayer who was a qualified taxpayer during the tax

 

year changes status and is not a qualified taxpayer or vice versa,

 

income subject to tax under this act shall be determined separately

 

for income in each status.

 

     (11) As used in this section:

 

     (a) "Domicile" means a place where a person has his or her

 

true, fixed, and permanent home and principal establishment to

 

which, whenever absent, he or she intends to return, and domicile

 

continues until another permanent establishment is established.

 

     (b) "Qualified renaissance zone" means only those geographic

 

areas in a renaissance zone that were designated as a renaissance

 

zone under the Michigan renaissance zone act, 1996 PA 376, MCL

 

125.2681 to 125.2696, before January 1, 2012. A qualified

 

renaissance zone does not include any portion of a renaissance zone

 

for which an extension or renewal is approved after December 31,

 

2011.

 

     (c) "Qualified taxpayer" means a taxpayer that is a resident

 

of a qualified renaissance zone and that has gross income not

 

exceeding $1,000,000.00 for any tax year for which the taxpayer

 

claims a credit under this section.

 

     (d) "Renaissance zone" means that term as defined in section 3

 

of the Michigan renaissance zone act, 1996 PA 376, MCL 125.2683.

 

     (e) "Resident" means an individual domiciled in an area that

 

is a qualified renaissance zone for a period of 183 consecutive

 

days. A taxpayer may begin calculating the 183-day period during

 

the 183 days immediately preceding the designation of the area as a

 

qualified renaissance zone. Resident includes the estate of an

 

individual who was a resident of a qualified renaissance zone at

 

the time of death. After a taxpayer has completed the 183-day

 

residency requirement under this subdivision, the taxpayer is

 

considered to have been a resident of that qualified renaissance

 

zone beginning from the first day used to determine if the 183-day

 

residency requirement has been met.

 

     Enacting section 1. This amendatory act takes effect January

 

1, 2012.

 

     Enacting section 2. This amendatory act does not take effect

 

unless House Bill No. 5157 of the 96th Legislature is enacted into

 

law.