Bill Text: MI SB0405 | 2017-2018 | 99th Legislature | Engrossed
Bill Title: Individual income tax; credit; tax credit for charitable donations to food banks, shelters, and community foundations; restore. Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 261.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Engrossed - Dead) 2017-12-13 - Referred To Committee On Tax Policy [SB0405 Detail]
Download: Michigan-2017-SB0405-Engrossed.html
SB-0405, As Passed Senate, December 13, 2017
SUBSTITUTE FOR
SENATE BILL NO. 405
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.713) by adding section 261.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 261. (1) For tax years beginning on and after January 1,
2018, a taxpayer may credit against the tax imposed by this part
for the tax year an amount, subject to the applicable limitations
under this section, equal to 50% of the aggregate amount of
charitable contributions made by the taxpayer during the tax year
to any of the following if a contribution to that entity is tax
deductible for the donor under the internal revenue code:
(a) A shelter for homeless persons, food kitchen, food bank,
or other entity located in this state, the primary purpose of which
is to provide overnight accommodation, food, or meals to persons
who are indigent.
(b) A zoological park accredited by the American Association
of Zoos and Aquariums.
(c) A museum.
(2) For tax years beginning on and after January 1, 2018, a
taxpayer may claim an additional credit against the tax imposed by
this part for the tax year an amount, subject to the applicable
limitations under this section, equal to 50% of the amount the
taxpayer contributes during the tax year to a community foundation.
For a taxpayer other than a resident estate or trust, the credit
allowed under this subsection shall not exceed $100.00, or $200.00
for a joint return. For a resident estate or trust, the credit
allowed under this subsection shall not exceed 10% of the
taxpayer's tax liability for the tax year before claiming any
credits allowed by this part or $5,000.00, whichever is less. For a
resident estate or trust, the amount used to calculate the credits
under this section shall not have been deducted in arriving at
federal taxable income.
(3) The maximum credit allowed under subsection (1) for total
contributions made, including the value of food items contributed
in conjunction with a program in which a vendor makes a matching
contribution of similar items in the tax year to shelters for
homeless persons, food kitchens, food banks, and, except for
community foundations, other entities is as follows:
(a) For a taxpayer other than a resident estate or trust, the
credit shall not exceed $100.00, or $200.00 for a joint return.
(b) For a resident estate or trust, the credit shall not
exceed 10% of the taxpayer's tax liability for the tax year before
claiming any credits allowed by this part or $5,000.00, whichever
is less.
(4) If the amount of the credits allowed under this section
exceeds the tax liability of the taxpayer for the tax year, the
portion that exceeds the tax liability shall not be refunded.
(5) An entity other than a community foundation may request
that the department determine if a contribution to that entity
qualifies for the credit under this section. The department shall
make a determination and respond to a request no later than 30 days
after the department receives the request.
(6) A taxpayer may claim a credit under this section for
contributions to a community foundation made before the expiration
of the 18-month period after a community foundation was
incorporated or established during which the community foundation
must build an endowment value of $100,000.00 as provided in
subsection (8)(a)(vii). If the community foundation does not reach
the required $100,000.00 endowment value during that 18-month
period, contributions to the community foundation made after the
date on which the 18-month period expires shall not be used to
calculate a credit under this section. At any time after the
expiration of the 18-month period under subsection (8)(a)(vii) that
the community foundation has an endowment value of $100,000.00, the
community foundation may apply to the department for certification
under this section.
(7) On or before July 1 of each year, the department shall
report to the house committee on tax policy and the senate finance
committee the total amount of tax credits claimed under this
section for the immediately preceding tax year.
(8) As used in this section:
(a) "Community foundation" means an organization that applies
for certification on or before May 15 of the tax year for which the
taxpayer is claiming the credit and that the department certifies
for that tax year as meeting all of the following requirements:
(i) Qualifies for exemption from federal income taxation under
section 501(c)(3) of the internal revenue code.
(ii) Supports a broad range of charitable activities within
the specific geographic area of this state that it serves, such as
a municipality or county.
(iii) Maintains an ongoing program to attract new endowment
funds by seeking gifts and bequests from a wide range of potential
donors in the community or area served.
(iv) Is publicly supported as defined by the regulations of
the United States Department of Treasury, 26 CFR 1.170A-9(f)(10).
To maintain certification, the community foundation shall submit
documentation to the department annually that demonstrates
compliance with this subparagraph.
(v) Is not a supporting organization as described in section
509(a)(3) of the internal revenue code and the regulations of the
United States Department of Treasury, 26 CFR 1.509(a)-4 and
1.509(a)-5.
(vi) Meets the requirements for treatment as a single entity
contained in the regulations of the United States Department of
Treasury, 26 CFR 1.170A-9(f)(11).
(vii) Except as provided in subsection (6), is incorporated or
established as a trust at least 6 months before the beginning of
the tax year for which the credit under subsection (2) is claimed
and has an endowment value of at least $100,000.00 before the
expiration of 18 months after the community foundation is
incorporated or established.
(viii) Has an independent governing body representing the
general public's interest and that is not appointed by a single
outside entity.
(ix) Provides evidence to the department that the community
foundation has, before the expiration of 6 months after the
community foundation is incorporated or established, and maintains
continually during the tax year for which the credit under this
section is claimed, at least 1 part-time or full-time employee.
(x) For community foundations that have an endowment value of
$1,000,000.00 or more only, the community foundation is subject to
an annual independent financial audit and provides copies of that
audit to the department not more than 3 months after the completion
of the audit. For community foundations that have an endowment
value of less than $1,000,000.00, the community foundation is
subject to an annual review and an audit every third year.
(xi) In addition to all other criteria listed in this
subdivision for a community foundation that is incorporated or
established after June 22, 2000, operates in a county of this state
that was not served by a community foundation when the community
foundation was incorporated or established or operates as a
geographic component of an existing certified community foundation.
(b) "Museum" means an institution generally known as a museum
or archive located in this state that is or does each of the
following:
(i) Established primarily for artistic, educational,
scientific, historic, or preservation purposes.
(ii) Exhibits, cares for, studies, archives, or catalogs
property.
(iii) Operated by a nonprofit corporation, college,
university, or public agency.
