HOUSE BILL No. 4946

September 13, 2011, Introduced by Rep. Gilbert and referred to the Committee on Tax Policy.

A bill to amend 1967 PA 281, entitled

"Income tax act of 1967,"

by amending section 611 (MCL 206.611), as added by 2011 PA 38.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 611. (1) "Tangible personal property" means that term as

defined in section 2 of the use tax act, 1937 PA 94, MCL 205.92.

(2) "Tax" means the tax imposed under this part, including

interest and penalties under this part, unless the term is given a

more limited meaning in the context of this part or a provision of

this part.

(3) "Tax-exempt person" means an organization that is exempt

from federal income tax under section 501(a) of the internal

revenue code, except the following:

(a) An organization exempt under section 501(c)(12) or (16) of

the internal revenue code.

(b) An organization exempt under section 501(c)(4) of the

internal revenue code that would be exempt under section 501(c)(12)

of the internal revenue code but for its failure to meet the

requirement in section 501(c)(12) that 85% or more of its income

must consist of amounts collected from members.

(4) "Tax year" means the calendar year, or the fiscal year

ending during the calendar year, upon the basis of which the tax

base of a taxpayer is computed under this part. If a return is made

for a fractional part of a year, tax year means the period for

which the return is made. Except for the first return required by

this part, a taxpayer's tax year is for the same period as is

covered by its federal income tax return. A taxpayer that has a 52-

or 53-week tax year beginning not more than 7 days before the end

of any month is considered to have a tax year beginning on the

first day of the subsequent month. A person included in a unitary

business group that joins or departs the unitary business group

other than at the end of that person's federal tax year shall have

a tax year beginning with its federal income tax period and ending

on the date of joining or departing the unitary business group, and

another tax year beginning on the date immediately after joining or

departing the unitary business group and ending with its federal

income tax period. If the term tax year in this part is used in

reference to 1 or more previous or preceding tax years and those

referenced tax years are before January 1, 2012, then those

referenced tax years are deemed those same tax years during which

former 1975 PA 228 or the Michigan business tax act, 2007 PA 36,

MCL 208.1101 to 208.1601, applied.

(5) "Taxpayer" means a corporation, insurance company,

financial institution, or unitary business group, whichever is

applicable under each chapter, that is liable for a tax, interest,

or penalty under this part. For purposes of chapters 11 and 14,

taxpayer does not include an insurance company or a financial

institution. For purposes of chapter 12, unless specifically

included in the section, taxpayer does not include a corporation or

a financial institution. For purposes of chapter 13, taxpayer does

not include a corporation or an insurance company.

(6) "Unitary business group" means a group of United States

persons that are corporations, insurance companies, or financial

institutions, other than a foreign operating entity, 1 of which

owns or controls, directly or indirectly, more than 50% of the

ownership interest with voting rights or ownership interests that

confer comparable rights to voting rights of the other members, and

that has business activities or operations which result in a flow

of value between or among members included in the unitary business

group or has business activities or operations that are integrated

with, are dependent upon, or contribute to each other.

(7) "United States person" means that term as defined in

section 7701(a)(30) of the internal revenue code and does not

include foreign persons disregarded for federal income tax

purposes.

(8) "Unrelated business activity" means, for a tax-exempt

person, business activity directly connected with an unrelated