HB-5191, As Passed House, March 1, 2016

 

 

 

 

 

 

 

 

 

 

 

 

SUBSTITUTE FOR

 

HOUSE BILL NO. 5191

 

 

 

 

 

 

 

 

 

 

 

 

     A bill to amend 1941 PA 122, entitled

 

"An act to establish the revenue collection duties of the

department of treasury; to prescribe its powers and duties as the

revenue collection agency of this state; to prescribe certain

powers and duties of the state treasurer; to establish the

collection duties of certain other state departments for money or

accounts owed to this state; to regulate the importation, stamping,

and disposition of certain tobacco products; to provide for the

transfer of powers and duties now vested in certain other state

boards, commissions, departments, and offices; to prescribe certain

duties of and require certain reports from the department of

treasury; to provide procedures for the payment, administration,

audit, assessment, levy of interests or penalties on, and appeals

of taxes and tax liability; to prescribe its powers and duties if

an agreement to act as agent for a city to administer, collect, and

enforce the city income tax act on behalf of a city is entered into

with any city; to provide an appropriation; to abolish the state

board of tax administration; to prescribe penalties and provide

remedies; and to declare the effect of this act,"

 

by amending section 30 (MCL 205.30), as amended by 2014 PA 424.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 30. (1) The department shall credit or refund an

overpayment of taxes; taxes, penalties, and interest erroneously

 

assessed and collected; and taxes, penalties, and interest that are

 

found unjustly assessed, excessive in amount, or wrongfully

 

collected with interest at the rate calculated under section 23 for

 

deficiencies in tax payments.

 

     (2) A taxpayer who paid a tax that the taxpayer claims is not

 

due may petition the department for refund of the amount paid

 

within the time period specified as the statute of limitations in

 

section 27a. If a tax return reflects an overpayment or credits in

 

excess of the tax, the declaration of that fact on the return

 

constitutes a claim for refund. If the department agrees the claim

 

is valid, the amount of overpayment, penalties, and interest shall

 

be first applied to any known liability as provided in section 30a,

 

and the excess, if any, shall be refunded to the taxpayer or

 

credited, at the taxpayer's request, against any current or

 

subsequent tax liability. Claims Except claims for refunds, other

 

than those made under part 1 of the income tax act of 1967, 1967 PA

 

281, MCL 206.1 to 206.532, that have not been approved, denied, or

 

adjusted within 1 year of the date received may be treated as

 

denied at the election of the taxpayer, and may be appealed by the

 

taxpayer in accordance with section 22.

 

     (3) The department shall certify a refund to the state

 

disbursing authority who shall pay the amount out of the proceeds

 

of the tax in accordance with the accounting laws of the state.

 

Interest at the rate calculated under section 23 for deficiencies

 

in tax payments regarding those refunds shall be added to the

 

refund commencing 45 days after the claim is filed or 45 days after

 

the date established by law for the filing of the return, whichever

 

is later. Interest on refunds intercepted and applied as provided

 

in section 30a shall cease as of the date of interception. Refunds

 

for amounts of less than $1.00 shall not be paid.

 

     (4) Beginning January 1, 2014, in addition to and separate

 

from the interest added to a refund under subsection (3), for

 

refunds for taxes imposed under part 1 of the income tax act of

 

1967, 1967 PA 281, MCL 206.1 to 206.532, the state disbursing

 

authority shall add interest to refunds that are not paid within 1

 

of the following dates for the applicable tax year:

 

     (a) May 1, for returns received by the department on or before

 

March 1 of the applicable tax year.

 

     (b) Sixty days from the date the return was received by the

 

department for returns received by the department after March 1 of

 

the applicable tax year.

 

     (5) Interest described in subsection (4) shall be paid at a

 

rate of 3% per annum, calculated from the date the original return

 

was due under section 315(1) of the income tax act of 1967, 1967 PA

 

281, MCL 206.315, and until the refund is paid, a date preceding

 

the date of the refund by not more than 7 days, if all of the

 

following conditions are met:

 

     (a) The refund is due on an original return which was timely

 

filed under section 315(1) of the income tax act of 1967, 1967 PA

 

281, MCL 206.315.

 

     (b) The refund is not adjusted by the department.

 

     (c) The return is not subject to section 27a(3) or (4) except

 

for audit by the department.

 

     (d) The return is complete for processing purposes with no

 

calculation errors and contains all required information as

 

prescribed by the department under section 315(1)(d) of the income

 

tax act of 1967, 1967 PA 281, MCL 206.315, including any state and

 

federal returns, forms, or schedules necessary to process the

 

return.

 

     (e) The taxpayer who has filed a complete return under

 

subdivision (d) has complied with the department's request, if any,

 

for additional documentation or information within 30 days of that

 

request.

 

     (f) No portion of the refund is subject to interception under

 

section 30a.

 

     (g) The amount to be refunded is more than $1.00.

 

     (6) Beginning January 1, 2015, in addition to and separate

 

from the interest added to a refund under subsection (3), for

 

refunds for taxes imposed under the Michigan business tax act, 2007

 

PA 36, MCL 208.1101 to 208.1601, the state disbursing authority

 

shall add interest to refunds that are not paid within 90 days

 

after the claim is approved or 90 days after the date established

 

by law for filing the return, whichever is later. Interest

 

described in this subsection shall be paid at a rate of 3% per

 

annum for each day the refund is not issued within the time frame

 

required in this subsection if all of the following conditions are

 

met:

 

     (a) The refund is claimed on an original return which was

 

timely filed under section 505(1) of the Michigan business tax act,

 

2007 PA 36, MCL 208.1505.

 

     (b) The refund is not adjusted by the department.

 

     (c) The refund is not claimed by a taxpayer filing as a

 

unitary business group.

 

     (d) The return is not subject to section 27a(3) or (4) except

 

for audit by the department.

 

     (e) The return is complete for processing purposes with no

 

calculation errors and contains all required information as

 

prescribed by the department under section 507 or 509 of the

 

Michigan business tax act, 2007 PA 36, MCL 208.1507 and 208.1509,

 

including any state and federal returns, forms, or schedules

 

necessary to process the return.

 

     (f) The taxpayer who has filed a complete return under

 

subdivision (e) has complied with the department's request, if any,

 

for additional documentation or information within 30 days of that

 

request.

 

     (g) No portion of the refund is subject to interception under

 

section 30a.

 

     (h) The amount to be refunded is more than $10.00.

 

     (7) Beginning January 1, 2017, the interest calculations in

 

subsections (3), (4), (5), and (6) also apply to refunds of credits

 

authorized under section 36109 of the natural resources and

 

environmental protection act, 1994 PA 451, MCL 324.36109. If the

 

state disbursing authority does not pay or refund a credit

 

described in this subsection within 45 days from the date the

 

return was received by the department, the department shall notify

 

the taxpayer of the status of the return and whether the taxpayer

 

has filed a complete return.