Bill Text: MI HB6449 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Individual income tax; exemptions; personal exemption amount, homestead property tax credit, and ability to elect to pay Michigan business tax; increase, modify, and sunset. Amends secs. 30a, 520 & 680 of 1967 PA 281 (MCL 206.30a et seq.).
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2018-11-07 - Bill Electronically Reproduced 10/17/2018 [HB6449 Detail]
Download: Michigan-2017-HB6449-Introduced.html
HOUSE BILL No. 6449
October 17, 2018, Introduced by Rep. Howrylak and referred to the Committee on Tax Policy.
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending sections 30a, 520, and 680 (MCL 206.30a, 206.520, and
206.680), section 30a as amended by 2018 PA 38, section 520 as
amended by 2015 PA 179, and section 680 as amended by 2012 PA 70.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 30a. Notwithstanding any other provision of this part,
for
the 2012 tax year and each tax year after 2012, through the
2021
tax year, taxable income for
purposes of this part means
taxable income as determined under section 30 with the following
adjustment. For the 2012 tax year and each tax year after 2012,
through
the 2021 tax year, to determine
taxable income, a taxpayer
shall claim a personal exemption deduction equal to the amount
calculated pursuant to section 30(2) or equal to the following
amounts multiplied by the number of personal and dependency
exemptions allowable under section 30(2), whichever calculation is
greater:
(a) Beginning on and after October 1, 2012 and before January
1, 2014, $3,950.00. The department shall annualize the personal
exemption deduction for the 2012 tax year, rounded to the nearest
$1.00.
(b) Beginning on and after January 1, 2014 and before January
1, 2018, $4,000.00.
(c) For the 2018 tax year, $4,050.00.
(d)
For the 2019 tax year, $4,400.00.$5,500.00.
(e)
For the 2020 tax year, $4,750.00.
(f)
For the 2021 tax year, $4,900.00.
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 2018
tax
year. Beginning with the 2021 2019
tax year and each tax year
after
2021, 2019, 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
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
2018 tax year, and 21% of the gross rent paid for tax years after
the 2018 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
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
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 tax year and each tax year after
2021, 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 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"
Consumer Price Index" means the United States consumer price
index
Consumer Price Index for all urban consumers as defined and
reported by the United States Department of Labor, Bureau of Labor
Statistics.
Sec. 680. (1) Notwithstanding any other provision of this
part, except as otherwise provided in subsection (2) for a
certificated credit under section 435 or 437 of the Michigan
business tax act, 2007 PA 36, MCL 208.1435 and 208.1437, a taxpayer
that has been approved to receive, has received, or has been
assigned a certificated credit that has not been fully claimed or
paid prior to January 1, 2012 may, for the taxpayer's first tax
year ending after December 31, 2011 only, elect to file a return
and pay the tax imposed by the Michigan business tax act, 2007 PA
36, MCL 208.1101 to 208.1601, in lieu of the tax imposed by this
part. An election under this subsection shall continue for the
period prescribed in section 500(1) of the Michigan business tax
act, 2007 PA 36, MCL 208.1500.
(2) A taxpayer with a certificated credit under section 435 or
437 of the Michigan business tax act, 2007 PA 36, MCL 208.1435 and
208.1437, which certificated credit may be claimed in a tax year
ending after December 31, 2011 may, through the 2018 tax year only,
elect to pay the tax imposed by the Michigan business tax act, 2007
PA 36, MCL 208.1101 to 208.1601, in the tax year in which that
certificated credit or any unused carryforward may be claimed in
lieu of the tax imposed by this part. A taxpayer is not allowed to
make an election to pay the tax imposed by the Michigan business
tax act, 2007 PA 36, MCL 208.1101 to 208.1601, under this
subsection after the 2018 tax year.
(3) A taxpayer that is a member of a unitary business group
and that has a certificated credit under sections 431 and 434(2)
and (5) of the Michigan business tax act, 2007 PA 36, MCL 208.1431
and 208.1434, is not required to file a combined return as a
unitary business group and may elect to file a separate return and
pay the tax, if any, under the Michigan business tax act, 2007 PA
36, MCL 208.1101 to 208.1601.
(4) A taxpayer that elects to pay the tax imposed by the
Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1601,
under this section is not required to file an annual return under
this part.
(5) As used in this section, "certificated credit" means that
term as defined in section 107 of the Michigan business tax act,
2007 PA 36, MCL 208.1107.
