HOUSE BILL NO. 5200

November 06, 2019, Introduced by Reps. Clemente, Hammoud, Ellison, Lasinski, Hood, Sowerby, Shannon, Tate, Manoogian, Sabo, Cherry, Brixie, Pagan, Haadsma, Wittenberg, Guerra and Bolden and referred to the Committee on Tax Policy.

"Income tax act of 1967,"

(MCL 206.1 to 206.713) by adding sections 279 and 679.

the people of the state of michigan enact:

Sec. 279. (1) For tax years beginning on and after January 1, 2020, a qualified taxpayer may claim a credit against the tax imposed by this part equal to the sum of 50% of the qualified expenses defined in subsection (5)(c)(i) and (ii) and 100% of the qualified expenses defined in subsection (5)(c)(iii) paid by the qualified taxpayer in the tax year or $2,000.00 for each apprentice trained by the qualified taxpayer in the tax year, whichever is less.

(2) If the credit allowed under this section exceeds the tax liability of the taxpayer under this act for the tax year, that portion of the credit that exceeds the tax liability shall be refunded.

(3) The credit allowed under this section shall be claimed on the annual return required under section 311. For a taxpayer that is not required to file an annual return, the department shall provide that the credit under this section may be claimed on a form prescribed by the department.

(4) For each year that this credit is in effect, the department of labor and economic opportunity shall prepare a report containing information including, but not limited to, the number of qualified taxpayers taking advantage of the apprenticeship credit, the number of apprentices participating in the program, the number of apprentices who complete a program the costs of which were the basis of a credit under this section, the number of apprentices that were hired by the taxpayer after the apprenticeship training was completed for which the taxpayer claimed a credit under this section for the costs of training that apprentice, information on the employment status of individuals who have completed an apprenticeship to the extent the information is available, and the fiscal impact of the apprenticeship credit. This report shall then be transmitted to the house tax policy and senate finance committees and to the house and senate appropriations committees. This report shall be due no later than the first day of March each year.

(5) As used in this section:

(a) "Apprentice" means a person who is a resident of this state, is 16 years of age or older, and is trained by a taxpayer through a program that meets all of the following criteria:

(i) The program is registered with the employment and training administration of the United States Department of Labor.

(ii) The program is provided pursuant to an apprenticeship agreement signed by the taxpayer and the apprentice.

(iii) The program is filed with a local workforce development board.

(b) "Local workforce development board" means a board authorized under the workforce innovation and opportunity act in 29 USC 3101 to 3361 that has the responsibility to ensure that the workforce needs of the employers in the geographic area governed by the local unit of government are met.

(c) "Qualified expenses" means all of the following expenses paid by the taxpayer in a tax year that begins after December 31, 2019 that were not paid for with funds the taxpayer received or retained, that the taxpayer would not otherwise have received or retained, and that are used for training an apprentice:

(i) Salary and wages paid to an apprentice.

(ii) Fringe benefits and other payroll expenses paid for the benefit of an apprentice.

(iii) Costs of classroom instruction and related expenses identified as costs for which the taxpayer is responsible under an apprenticeship agreement, including, but not limited to, tuition, fees, and books for college-level courses.

(d) "Qualified taxpayer" means a taxpayer that has 20 full-time employees or less.

Sec. 679. (1) For tax years beginning on and after January 1, 2020, a qualified taxpayer may claim a credit against the tax imposed by this part equal to the sum of 50% of the qualified expenses defined in subsection (5)(c)(i) and (ii) and 100% of the qualified expenses defined in subsection (5)(c)(iii) paid by the qualified taxpayer in the tax year or $2,000.00 for each apprentice trained by the qualified taxpayer in the tax year, whichever is less.