Bill Text: MI SB1117 | 2013-2014 | 97th Legislature | Introduced

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Bill Title: Corporate income tax; credits; credit for certain taxpayers that provide employment to unemployed individuals; create. Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 672.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2014-10-22 - Referred To Committee On Finance [SB1117 Detail]

Download: Michigan-2013-SB1117-Introduced.html

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SENATE BILL No. 1117

 

 

October 22, 2014, Introduced by Senators YOUNG, JOHNSON, HOOD, GREGORY, BIEDA, HOPGOOD, SMITH, ANANICH and ANDERSON 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 672.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 672. (1) For tax years beginning on and after January 1,

 

2013, a qualified taxpayer may claim a credit against the tax

 

imposed by this act for each qualified employee during the tax year

 

of an amount equal to 20% of the compensation paid by the qualified

 

taxpayer to the qualified employee during the tax year or

 

$3,000.00, whichever is less.

 

     (2) If the credit allowed under this section for the tax year

 

and any unused carryforward of the credit allowed under this

 

section exceed the tax liability of the qualified taxpayer for the

 

tax year, the excess shall not be refunded, but may be carried

 

forward as an offset to the tax liability in subsequent tax years

 

for 5 tax years or until the excess credit is used up, whichever

 

occurs first.

 

     (3) If a taxpayer terminates the employment of a qualified

 

employee for which a credit under this section was claimed within 1

 

year after the taxpayer hired that employee, the department may

 

reduce, terminate, or have a percentage of the amount of the credit

 

already claimed under this section added back to the tax liability

 

of the taxpayer in the tax year that the taxpayer terminated that

 

employee.

 

     (4) For purposes of this section, taxpayer includes a

 

financial institution and an insurance company.

 

     (5) As used in this section:

 

     (a) "Compensation" means all wages, salaries, fees, bonuses,

 

commissions, and other payments made in the tax year on behalf of

 

or for the benefit of employees, officers, or directors of the

 

taxpayers. Compensation includes, but is not limited to, payments

 

that are subject to or specifically exempt or excepted from

 

withholding under sections 3401 to 3406 of the internal revenue

 

code. Compensation also includes, on a cash or accrual basis

 

consistent with the taxpayer's method of accounting for federal

 

income tax purposes, payments to a pension, retirement, or profit

 

sharing plan other than those payments attributable to unfunded

 

accrued actuarial liabilities, and payments for insurance for which

 

employees are the beneficiaries, including payments under health

 

and welfare and noninsured benefit plans and payment of fees for

 

the administration of health and welfare and noninsured benefit

 

plans. Compensation does not include any of the following:

 

     (i) Discounts on the price of the taxpayer's merchandise or

 

services sold to the taxpayer's employees, officers, or directors

 

that are not available to other customers.

 

     (ii) Except as otherwise provided in this subdivision, payments

 

to an independent contractor.

 

     (iii) Payments to state and federal unemployment compensation

 

funds.

 

     (iv) The employer's portion of payments under the federal

 

insurance contributions act, 26 USC 3101 to 3128, the railroad

 

retirement tax act, 26 USC 3201 to 3241, and similar social

 

insurance programs.

 

     (v) Payments, including self-insurance payments, for worker's

 

compensation insurance or federal employers' liability act

 

insurance pursuant to 45 USC 51 to 60.

 

     (b) "Dependent" means that term as defined in section 152 of

 

the internal revenue code.

 

     (c) "Full-time job" means a job performed by an individual for

 

35 hours or more each week and whose income and social security

 

taxes are withheld from the wages earned by that individual for

 

performing the job.

 

     (d) "Qualified employee" means any individual who satisfies

 

each of the following:

 

     (i) Is currently unemployed and certifies by signed affidavit

 

that he or she has not held a full-time job during the immediately

 

preceding 60-day period before the date that he or she began

 

employment with the qualified taxpayer.

 

     (ii) Is not employed by the qualified taxpayer to replace

 

another employee of that qualified taxpayer unless that other

 

employee separated from employment voluntarily or for cause.

 

     (iii) Is not a relative or dependent of an individual who owns,

 

directly or indirectly, more than 50% in value of the outstanding

 

stock of the qualified taxpayer, or if the qualified taxpayer is an

 

entity other than a corporation, is not a relative or dependent to

 

any individual who owns, directly or indirectly, more than 50% of

 

the capital and profits interests in the entity.

 

     (e) "Qualified taxpayer" means a taxpayer that is an employer

 

that employs fewer than 100 full-time employees.

 

     (f) "Relative" means an individual who bears a relationship

 

described in section 152(d)(2)(A) through (H) of the internal

 

revenue code to the qualified employer.

 

     (g) "Unemployed" means an individual who is without a job and

 

who wants and is available for work. For purposes of this section,

 

an individual who is retired or receiving a pension, or both, is

 

considered unemployed if he or she does not have a job, has

 

actively looked for work in the prior 4 weeks, and is currently

 

available and able to work.