Michigan Corporate and Individual Income Tax Clean-up Bills - Part II
Posted on Wed, Jan 04, 2012
Continued from: Part I " The governor's pen was busy in December." Several bills from Michigan's House and Senate were signed within the last week affecting Michigan's Corporate Income Tax and Individual Income Tax.
You can click on the bill's name (below) to access that specific bill on www.legislature.mi.gov.
Amends the Michigan Renaissance Zone Act to include a citation to Section 31a of the Income Tax Act in a provision that lists the sections of law that allow an individual who is a resident of a renaissance zone, or a business that conducts business activity in a renaissance zone, to receive an exemption, deduction, or credit.
Amends Section 9 of 1996 PA 376 (MCL125.2689). TIE BAR WITH: SB 0748'11
Last Action: 12/29/2011 Analysis File Added
Amends the definition of "flow-through" entity to exclude any entity disregarded under Section 699 (added in Senate Bill 678). A "flow-through entity" is an entity that is treated as a subchapter S corporation under the Internal Revenue Code (IRC), a general or limited partnership, a trust, or a limited liability partnership or company, which for the tax year is not taxed as a corporation for Federal income tax purposes.
Amends Sec 653 of 1967 PA 281 (MCL 206.607).
Last Action: 12/28/2011 ASSIGNED PA 0306'11 WITH IMMEDIATE EFFECT
Deletes the definition of "disregarded entity", which refers to a qualified subchapter S subsidiary under a specific section of the IRC or a single member limited liability company that has not elected to be classified as a corporation under a particular Federal regulation.
Amends sec. 605 of 1967 PA 281 (MCL 206.605).
Last Action: 12/28/2011 ASSIGNED PA 0307'11 WITH IMMEDIATE EFFECT
Amends Section 663 to require a taxpayer's numerator to include the taxpayer's proportionate share of the total sales, in this state, of a flow-through entity that is unitary with the taxpayer. The denominator would have to include the taxpayer's proportionate share of the total sales, everywhere, of a flow-through entity that is unitary with the taxpayer.
Amends sec. 663 of 1967 PA 281 (MCL 206.663).
Last Action: 12/28/2011 ASSIGNED PA 0308'11 WITH IMMEDIATE EFFECT
Adds Section 699, notwithstanding any other provision of the Act, a person that was a disregarded entity for Federal income tax purposes under the IRC would have to be classified as a disregarded entity for purposes of Parts 2 and 3 of the Act. (Part 3 prescribes withholding requirements that apply to flow-through entities and others.)
Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 699.
Last Action: 12/28/2011 ASSIGNED PA 0309'11 WITH IMMEDIATE EFFECT
Adds Section 31a to the Income Tax Act to allow a taxpayer to deduct income, dividends, capital gains, and lottery winnings, if the taxpayer is a resident of a renaissance zone for 183 consecutive days and his or her gross income does not exceed $1.0 million, and the renaissance zone was designated before January 1, 2012.
Amends 1967 PA 281 (MCL 206.1 - 206.713) by adding sec. 31a. TIE BAR WITH: HB 5157'11
Last Action: 12/29/2011 Analysis File Added
Amends Section 661, which provides that, for a taxpayer that has an ownership or beneficial interest in a flow-through entity, the taxpayer's business income that is directly attributable to the business activity of the flow-through entity must be apportioned to Michigan using an apportionment factor determined under Section 663, unless the flow-through entity is unitary with the taxpayer for apportionment.
Amends sec. 661 of 1967 PA 281 (MCL 206.661).
I will cover Senate Bills 368 & 369 in the next two blog posts. As always, should you have any questions, do not hesitate to e-mail me at ronk@ehtc.com.
