October 12, 2011, Introduced by Senators HILDENBRAND 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 31a.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 31a. (1) Notwithstanding any other provision of this act
and for the 2012 tax year and each tax year after 2012, "taxable
income" means taxable income as determined under section 30 and,
except as otherwise provided, subsequently adjusted under this
section.
(2) For the 2012 tax year and each tax year after 2012 and to
the extent and for the duration provided in the Michigan
renaissance zone act, 1996 PA 376, MCL 125.2681 to 125.2696, to
determine taxable income, a qualified taxpayer may deduct, to the
extent included in adjusted gross income, an amount equal to the
sum of all of the following:
(a) Except as provided in subdivisions (b), (c), and (d),
income earned or received during the period of time that the
qualified taxpayer was a resident of a renaissance zone.
(b) Interest and dividends received in the tax year during the
period that the qualified taxpayer was a resident of a renaissance
zone.
(c) Capital gains received in the tax year prorated based on
the percentage of time that the asset was held by the qualified
taxpayer while the qualified taxpayer was a resident of the
renaissance zone.
(d) Income received by the qualified taxpayer from winning an
on-line lottery game sponsored by this state only if the date on
which the drawing for that game was held was after the taxpayer
became a resident of a renaissance zone and income received by the
qualified taxpayer from winning an instant lottery game sponsored
by this state only if the taxpayer was a resident of a renaissance
zone on the validation date of the lottery ticket for that game.
(3) Income used to calculate a deduction under any other
section of this act shall not be used to calculate a deduction
under this section.
(4) If a qualified taxpayer completes the residency
requirements under subsection (11)(d) before January 1, 2012, the
qualified taxpayer may claim the deduction allowed under this
section.
(5) To be eligible for the deduction under this section, a
taxpayer shall file an annual return under this act.
(6) A qualified taxpayer shall file a withholding form
prescribed by the department with his or her employer within 10
days after the date the taxpayer completes the requirements under
subsection (11)(d).
(7) If the department finds that a taxpayer has claimed a
deduction under this section to which he or she is not entitled,
the taxpayer is subject to the interest and penalty provisions
under 1941 PA 122, MCL 205.1 to 205.31.
(8) Any portion of taxable income derived from illegal
activity conducted anywhere shall not be used to calculate a
deduction under this section.
(9) The net operating loss deduction allowed under section
30(1)(n) shall be calculated without regard to the deductions
allowed under this section.
(10) If a taxpayer who was a qualified taxpayer during the tax
year changes status and is not a qualified taxpayer or vice versa,
income subject to tax under this act shall be determined separately
for income in each status.
(11) As used in this section:
(a) "Domicile" means a place where a person has his or her
true, fixed, and permanent home and principal establishment to
which, whenever absent, he or she intends to return, and domicile
continues until another permanent establishment is established.
(b) "Qualified taxpayer" means a taxpayer that is a resident
of a renaissance zone before January 1, 2012 and that has gross
income not exceeding $1,000,000.00 for any tax year for which the
taxpayer claims a credit under this section.
(c) "Renaissance zone" means that term as defined in section 3
of the Michigan renaissance zone act, 1996 PA 376, MCL 125.2683.
(d) "Resident" means an individual domiciled in an area that
is designated a renaissance zone for a period of 183 consecutive
days. A taxpayer may begin calculating the 183-day period during
the 183 days immediately preceding the designation of the area as a
renaissance zone. Resident includes the estate of an individual who
was a resident of a renaissance zone at the time of death. After a
taxpayer has completed the 183-day residency requirement under this
subdivision, the taxpayer is considered to have been a resident of
that renaissance zone beginning from the first day used to
determine if the 183-day residency requirement has been met.
Enacting section 1. This amendatory act takes effect January
1, 2012.