Bill Text: MI SB0405 | 2017-2018 | 99th Legislature | Introduced
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-Introduced.html
SENATE BILL No. 405
May 24, 2017, Introduced by Senators SCHUITMAKER, COLBECK and HANSEN and referred to the Committee on Finance.
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 and subject to the applicable limitations in this section, a
taxpayer may credit against the tax imposed by this part 50% of the
sum of the cash amount and, if food items are contributed in
conjunction with a program in which a vendor makes a matching
contribution of similar items, the value of those food items the
taxpayer contributes during the tax year to 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 if a
contribution to that entity is tax deductible for the donor under
the internal revenue code.
(2) For a taxpayer other than a resident estate or trust, the
credit allowed by this section for a contribution to a community
foundation shall not exceed $100.00, or $200.00 for a joint return.
A taxpayer may claim an additional credit under this section not to
exceed $100.00, or $200.00 for a joint return, for total cash
contributions made, including the value of food items contributed
as described in subsection (1) in the tax year to shelters for
homeless persons, food kitchens, food banks, and, except for
community foundations, other entities allowed under subsection (1).
A resident estate or trust may claim a credit under this section
not to exceed 10% of the taxpayer's tax liability for the tax year
before claiming any credits allowed by this act or $5,000.00,
whichever is less, for total cash contributions made, including the
value of food items contributed as described in subsection (1) in
the tax year to shelters for homeless persons, food kitchens, food
banks, and, except for community foundations, other entities
allowed under subsection (1). 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) Subject to the applicable limitations in this section,
when calculating the amount of the credit allowed under this
section a taxpayer may include as a cash contribution an amount
equal to the value of food items contributed as described in
subsection (1) in the tax year to a shelter for homeless persons,
food kitchen, food bank, or other entity located in this state as
described in subsection (1).
(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)(g). 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)(g) 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, "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:
(a) Qualifies for exemption from federal income taxation under
section 501(c)(3) of the internal revenue code.
(b) Supports a broad range of charitable activities within the
specific geographic area of this state that it serves, such as a
municipality or county.
(c) 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.
(d) 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 subdivision.
(e) 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.
(f) 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).
(g) 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 this section 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.
(h) Has an independent governing body representing the general
public's interest and that is not appointed by a single outside
entity.
(i) 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.
(j) 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.
(k) In addition to all other criteria listed in this
subsection 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.
