New, Retained, and Expanded Credits
New and Revised Tax Credits
- A new credit for 0.37% of Michigan compensation.
- A revised, 2.9% Michigan investment tax credit. (Compensation and Investment credits are limited to 65% of a taxpayer's tax liability, before credits.)
- A new credit for 1.9% of Michigan research and development expenses.
All three credits are limited to 75% of a taxpayer's tax liability, before credits.
Other New Credits
- Credit to phase out the gross receipts filing threshold. The credit equals a firm's tax liability before the credit multiplied by a fraction whose numerator equals the amount by which gross receipts is below $700,000, and the denominator equals $350,000.
- Michigan entrepreneurial credit. For tax years 2008-2010 only, the credit equals the increase in tax liability attributable to an employment increase, only for firms: 1) with prior tax year gross receipts of under $25 million; 2) that created or transferred to Michigan at least 20 new jobs during the preceding tax year; and 3) that made at least $1.25 million in capital investment in Michigan during the preceding tax year, excluding the purchase of any existing plant or equipment. Retail establishments do not qualify for this credit, except for new, independent restaurants.
- For the 2008-2010 tax years only, MEGA research credit for 30% of contributions a business makes to a small business to finance R & D, with a maximum credit of $300,000.
- Motor sports entertainment complex credit for 100% of the cost of any construction and upgrades, up to $1.7 million for the 2008-2010 tax years, $1.18 million for the 2011 tax year; and $650,000 for the 2012 tax year. A taxpayer shall expend at least $25 million on capital expenditures before January 1, 2011 (to claim this credit).
- Sports/Entertainment facility credit. A taxpayer that: 1) owns, operates, or leases more than one privately funded facility or stadium that has a capacity of at least 14,000 persons; and 2) has made a capital investment of at least $250 million into those facilities or stadiums. For the 2008-2010 tax years, the credit equals 65% of the taxpayer's total tax liability, up to $1.7 million; for the 2011 tax year, 45% of liability up to $1.18 million; for the 2012 tax year, 25% of liability up to $650,000.
- New motor vehicle dealer credit for 2% spent to acquire new motor vehicle inventory in a tax year, not to exceed $10,000.
- Michigan-headquartered large retailers' credit for 0.535% of Michigan compensation, up to $4.5 million, if the retailer has at least 17 million square feet of retail space and 2 million square feet of warehouse space in Michigan and meets a product line test.
- Michigan-headquartered retailers' credit for 0.125% of Michigan compensation, up to $300,000, if the retailer has at least 2.5 million square feet of retail space and 1.4 million of warehouse space in Michigan and meets a product line test.
- Credit for contributions of over $50,000 to art or history museum or to zoo. The credit is for 50% of the contribution over $50,000, up to a maximum credit of $100,000.
Other Retained or Expanded Credits
- Smaller business alternate tax credit. The SBT's small business alternate tax and credit is retained and expanded as follows: 1) the alternate tax rate is reduced to 1.8%; 2) the gross receipts limit is phased out between $19 and $20 million; 3) the adjusted business income limit for any one owner is phased in between $160,000 and $180,000; and 4) the total limit on adjusted business income is set at $1.3 million. The limits apply to all firms. Compensation paid by a PEO to officers of a client and to employees assigned to the client is included in determining the client's eligibility for the credit. There is no provision for controlled groups/entities under common control.
- Personal property tax credits: 35% for industrial personal property taxes; 23% for telecommunications personal property taxes, with the telecommunications credit dropping to13.5% after the 2008 tax year (to reflect a 2009 cut in their state property tax); and a 10% credit for natural gas pipeline taxes.
- Start-up business credit
- Michigan early stage venture capital credit
- Public contributions credit
- Workers' disability compensation credit
- Community foundation credit, expanded to include education foundations.
- Food bank and homeless shelter contribution credit
- Next energy credits
- Michigan Economic Growth Authority (MEGA) payroll credits
- Renaissance zone credit
- Historic Preservation credit
- Brownfield credit
- Low-grade hematite ore credit