Bill Text: MI SB0378 | 2019-2020 | 100th Legislature | Introduced


Bill Title: Corporate income tax; credits; qualified research and development tax credit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 674.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-06-13 - Referred To Committee On Economic And Small Business Development [SB0378 Detail]

Download: Michigan-2019-SB0378-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL No. 378

 

 

June 13, 2019, Introduced by Senators HORN, LASATA and MACDONALD and referred to the Committee on Economic and Small Business Development.

 

 

 

     A bill to amend 1967 PA 281, entitled

 

"Income tax act of 1967,"

 

(MCL 206.1 to 206.713) by adding section 674.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 674. (1) For tax years that begin after December 31,

 

2019, a taxpayer that has incurred qualified research and

 

development expenses in this state during the tax year may claim a

 

credit against the tax imposed by this part equal to the sum of the

 

following:

 

     (a) For a taxpayer that incurred qualified research and

 

development expenses within a qualified opportunity zone during

 

each of the tax years within the base period, 12% of the difference

 

between the amount of the taxpayer's qualified research and

 

development expenses incurred within a qualified opportunity zone

 


during the tax year for which the credit is claimed and an amount

 

equal to 50% of the average amount of the taxpayer's qualified

 

research and development expenses incurred within a qualified

 

opportunity zone during the base period.

 

     (b) For a taxpayer that did not incur qualified research and

 

development expenses within a qualified opportunity zone during 1

 

or more of the tax years within the base period, 6.4% of the

 

difference between the amount of the taxpayer's qualified research

 

and development expenses incurred within a qualified opportunity

 

zone during the tax year for which the credit is claimed and an

 

amount equal to 50% of the average amount of the taxpayer's

 

qualified research and development expenses incurred within a

 

qualified opportunity zone during the base period.

 

     (c) For a taxpayer that incurred qualified research and

 

development expenses outside of a qualified opportunity zone during

 

each of the tax years within the base period, 5% of the difference

 

between the amount of the taxpayer's qualified research and

 

development expenses incurred outside of a qualified opportunity

 

zone during the tax year for which the credit is claimed and an

 

amount equal to 50% of the average amount of the taxpayer's

 

qualified research and development expenses incurred outside of a

 

qualified opportunity zone during the base period.

 

     (d) For a taxpayer that did not incur qualified research and

 

development expenses outside of a qualified opportunity zone during

 

1 or more of the tax years within the base period, 2.14% of the

 

difference between the amount of the taxpayer's qualified research

 

and development expenses incurred outside of a qualified


opportunity zone during the tax year for which the credit is

 

claimed and an amount equal to 50% of the average amount of the

 

taxpayer's qualified research and development expenses incurred

 

outside of a qualified opportunity zone during the base period.

 

     (2) For each tax year for which a credit is claimed under this

 

section and for each tax year in a base period, a taxpayer shall

 

separately compute the qualified research and development expenses

 

incurred within a qualified opportunity zone and the qualified

 

research and development expenses incurred outside of a qualified

 

opportunity zone using a consistent method for each tax year.

 

     (3) A taxpayer shall claim a credit under this section after

 

all allowable nonrefundable credits under this part.

 

     (4) If the credit allowed under this section exceeds the tax

 

liability of the taxpayer for the tax year, that portion that

 

exceeds the tax liability is refundable to the taxpayer.

 

     (5) As used in this section:

 

     (a) "Advanced automotive technology" means technology as

 

described in section 88a(a)(iv) of the Michigan strategic fund act,

 

1984 PA 270, MCL 125.2088a.

 

     (b) "Automated driving system" and "automated motor vehicle"

 

mean those terms as defined in section 2b of the Michigan vehicle

 

code, 1949 PA 300, MCL 257.2b.

 

     (c) "Base period" means the 3 tax years immediately preceding

 

the tax year for which a credit is claimed under this section.

 

     (d) "Qualified opportunity zone" means a population census

 

tract that was designated as a qualified opportunity zone within

 

this state on or after December 22, 2017 under section 1400z-1 of


the internal revenue code. For purposes of this subdivision, the

 

designation of a particular population census tract as a qualified

 

opportunity zone remains in effect after the expiration of that

 

designation under section 1400z-1 of the internal revenue code and

 

applies to zones designated beginning January 1, 2017.

 

     (e) "Qualified research and development expenses" means

 

research and development expenses incurred in this state by a

 

taxpayer that is conducting business activity in this state if that

 

business activity is related to the design, engineering, testing,

 

or diagnostics of automated driving systems for automated motor

 

vehicles or related to advanced automotive technology.

 

     (f) "Research and development expenses" means research or

 

experimental expenditures as that term is defined by the

 

regulations of the United States Department of Treasury, 26 CFR

 

1.174-2. Research and development expenses do not include research

 

described in section 41(d)(4)(D), (F), (G), or (H) of the internal

 

revenue code.

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