Bill Text: MI HB5455 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Taxation; estates; tie between estate tax and the federal tax; modify. Amends secs. 32, 33 & 56 of 1899 PA 188 (MCL 205.232 et seq.) & adds sec. 32a.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2009-09-24 - Printed Bill Filed 09/24/2009 [HB5455 Detail]

Download: Michigan-2009-HB5455-Introduced.html

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HOUSE BILL No. 5455

 

September 23, 2009, Introduced by Reps. Miller and Smith and referred to the Committee on Tax Policy.

 

     A bill to amend 1899 PA 188, entitled

 

"Michigan estate tax act,"

 

by amending sections 32, 33, and 56 (MCL 205.232, 205.233, and

 

205.256), sections 32 and 33 as added by 1993 PA 54 and section 56

 

as amended by 1998 PA 277, and by adding section 32a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 32. (1) A Except as otherwise provided in section 32a, a

 

tax is imposed upon the transfer of the estate of every person who

 

at the time of death was a resident of this state. The tax is equal

 

to the maximum allowable federal credit under the internal revenue

 

code for estate, inheritance, legacy, and succession taxes paid to

 

the states. This tax shall be reduced by the amount of all estate,

 

inheritance, legacy, and succession taxes paid to states other than

 

Michigan this state, which amount shall not exceed an amount equal

 

to the proportional share of that maximum allowable federal credit

 

that the gross value of all real and tangible personal property

 

located in states other than this state bears to the gross value of

 

all property included in the decedent's gross estate wherever

 

located.

 

     (2) A Except as otherwise provided in section 32a, a tax is

 

imposed upon the transfer of property located in this state of

 

every person who at the time of death was not a resident of this

 

state. The tax is an amount equal to the proportional share of the

 

maximum allowable federal credit under the internal revenue code

 

for estate, inheritance, legacy, and succession taxes paid to the

 

states, that the gross value of all real and tangible personal

 

property located in this state bears to the gross value of all

 

property included in the decedent's gross estate wherever located.

 

     (3) For purposes of this section, the maximum allowable

 

federal credit under the internal revenue code means the maximum

 

allowable federal credit determined using the adjusted taxable

 

estate determined under the internal revenue code less the value of

 

all qualified family-owned business interests as defined in section

 

2057(e) of the internal revenue code, which meet the requirements

 

of section 2057(b)(1)(D) of the internal revenue code, 26 USC 2057,

 

and to the extent those interests are included in the adjusted

 

taxable estate.

 

     Sec. 32a. The taxes levied under this act shall not apply to

 

taxable estates, as defined in the internal revenue code, of less

 

than $2,000,000.00 if the decedent's date of death is on or after

 

April 1, 2009.

 

     Sec. 33. (1) A Except as otherwise provided in section 32a, a

 

tax is imposed upon every generation-skipping transfer in which the

 

original transferor is a resident of this state at the date of the

 

transfer made by the original transferor. The tax is equal to the

 

maximum allowable federal credit under the internal revenue code

 

for state generation-skipping transfer taxes paid to the states.

 

This tax shall be reduced by the amount of all generation-skipping

 

taxes paid to states other than this state, which amount shall not

 

exceed an amount equal to the proportional share of that maximum

 

allowable federal credit that the gross value of all transferred

 

real and tangible personal property subject to generation-skipping

 

transfer taxes located in states other than this state bears to the

 

gross value of all transferred property subject to generation-

 

skipping taxes wherever located.

 

     (2) A Except as otherwise provided in section 32a, a tax is

 

imposed upon every generation-skipping transfer in which the

 

original transferor is not a resident of this state at the date of

 

the transfer by the original transferor but in which the property

 

transferred includes real or tangible personal property located in

 

this state. The tax is an amount equal to the proportional share of

 

the maximum allowable federal credit under the internal revenue

 

code for state generation-skipping transfer taxes paid to the

 

states that the gross value of all transferred real and tangible

 

personal property subject to generation-skipping transfer taxes

 

located in this state bears to the gross value of all transferred

 

property subject to generation-skipping transfer taxes wherever

 

located.

 

     (3) For purposes of this section, the maximum allowable

 

federal credit under the internal revenue code means the maximum

 

allowable federal credit determined using the adjusted taxable

 

estate determined under the internal revenue code less the value of

 

all qualified family-owned business interests as defined in section

 

2057(e) of the internal revenue code, 26 USC 2057, which meet the

 

requirements of section 2057(b)(1)(D) of the internal revenue code,

 

26 USC 2057, and to the extent those interests are included in the

 

adjusted taxable estate.

 

     Sec. 56. As used in this act:

 

     (a) "Decedent" means a deceased person and includes, but is

 

not limited to, a testator, grantor, bargainor, vendor, donor, or

 

person who dies intestate.

 

     (b) "Department" means the bureau of revenue of the department

 

of treasury.

 

     (c) "Federal generation-skipping transfer tax" means the tax

 

imposed by chapter 13 of subtitle B of the internal revenue code.

 

     (d) "Federal return" means any United States transfer tax

 

return including federal estate tax returns and generation-skipping

 

tax returns unless the context indicates a similar Michigan tax

 

return.

 

     (e) "Generation-skipping transfer" means every transfer

 

subject to the federal generation-skipping transfer tax in which

 

the original transferor is a resident of this state at the date of

 

the transfer by the original transferor or the property transferred

 

is real or personal property situated in this state.

 

     (f) "Gross estate" means the gross estate determined under the

 

internal revenue code.

 

     (g) "Internal revenue code" means the United States internal

 

revenue code of 1986, in effect on January 1, 1998 or, at the

 

option of the personal representative, in effect on the date of the

 

decedent's death 2001.

 

     (h) "Intangible personal property" means incorporeal personal

 

property including, but not limited to, deposits in banks,

 

negotiable instruments, mortgages, debts, receivables, shares of

 

stock, bonds, notes, credits, evidences of an interest in property,

 

evidences of debt, and choses in action generally.

 

     (i) "Nonresident" means an individual who is not a resident.

 

     (j) "Original transferor" means any grantor, donor, trustor,

 

testator, or person who by grant, gift, trust, will, or otherwise,

 

makes a transfer of real or personal property that results in a

 

federal generation-skipping transfer tax.

 

     (k) "Person" means an individual, firm, partnership, joint

 

venture, association, corporation, limited liability company,

 

company, estate, or any other group or combination acting as a

 

unit. Person does not include public corporations.

 

     (l) "Personal representative" means the personal representative

 

appointed by the probate court, including an independent personal

 

representative, or, if a personal representative is not acting,

 

then any person who is in the actual or constructive possession of

 

any property included in the gross estate of the decedent or any

 

other person who is required to file a return or pay the taxes due

 

under any provision of this act. A safe and collateral deposit

 

company, trust company, corporation, bank, or other institution is

 

not the personal representative of property held in a safe deposit

 

box or of money or property on deposit if the indicated ownership

 

or registered title denotes ownership by right of survivorship. A

 

safe and collateral deposit company, trust company, corporation,

 

bank, or other institution is the personal representative of

 

property that it is holding if it is a court-appointed personal

 

representative, including an independent personal representative,

 

or, if a personal representative is not acting, if it is holding

 

property in a fiduciary capacity as a trustee or successor trustee.

 

     (m) "Resident" means that term as defined in section 18 of the

 

income tax act of 1967, 1967 PA 281, MCL 206.18. However, nothing

 

in this act diminishes the settling of domiciles of decedents under

 

1956 PA 173, MCL 205.601 to 205.607.

 

     (n) "Tangible personal property" means corporeal personal

 

property.

 

     (o) "Transfer" means the passing of property or any interest

 

in property, in possession or enjoyment, present or future, by

 

inheritance, descent, devise, succession, bequest, grant, deed,

 

bargain, sale, gift, or appointment.

 

     (p) "Transfer tax" includes an estate, generation-skipping,

 

inheritance, legacy, or succession tax for residents and

 

nonresidents, including aliens.

 

     (q) "United States" when used in a geographical sense includes

 

only the 50 states and the District of Columbia.