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Credits 2. How are existing MBT credits, or those awarded but not yet certified, handled under the CIT?

Credits 2. How are existing MBT credits, or those awarded but not yet certified, handled under the CIT?

All MBT credits, except those certificated credits defined at MCL 208.1107(1), are extinguished as of January 1, 2012, for CIT purposes. However, businesses that have been approved to receive, have received, or have been assigned certain certificated credits may elect to file a return and pay the tax imposed by the MBT in lieu of the CIT until the certificated credits are exhausted or extinguished. Certificated credits that may permit a business this MBT election include the following:

  • Brownfield Rehabilitation Credit under MCL 208.1437;
  • Historic Preservation Credit under MCL 208.1435;
  • MEGA Photovoltaic Technology Credit under MCL 208.1430;
  • MEGA Employment Credit under MCL 208.1431;
  • Anchor Company Payroll Credit under MCL 208.1431a;
  • MEGA Federal Contract Credit under MCL 208.1431b;
  • Anchor Company Taxable Value Credit under MCL 208.1431c;
  • MEGA Poly-Silicon Energy Cost Credit under MCL 208.1432;
  • Battery Credits under MCL 208.1434;
  • Hybrid Technology Research and Development Credit under MCL 208.1450;
  • Certain Renaissance Zone Credits under MCL 208.1433;
  • Film Production Credit under MCL 208.1455;
  • Film Infrastructure Credit under MCL 208.1457;
  • Farmland Preservation Credit under MCL 324.36109;
  • Tax Voucher Certificates under MCL 208.1419 or the Michigan Early Stage Venture Investment Act of 2003; and
  • NASCAR Credits under MCL 208.1409.

Except for taxpayers holding qualifying historic preservation or brownfield certificated credits, a taxpayer is required to make the election to continue under the MBT “for the taxpayer’s first tax year ending after December 31, 2011.” MCL 208.1500(1). A taxpayer holding a pre-approval letter for a brownfield credit or a pre-approval letter, approved rehabilitation plan, or approved enhanced or special high community impact plan for a historic preservation credit may elect to pay under the MBT in “the tax year in which that certificated credit may be claimed.” MCL 208.1500(2)-(3). Or, in the case of a multi-phase project for either of these credits, a taxpayer may elect to pay under the MBT in each tax year the credit is payable; except that a taxpayer with a multi-phase brownfield credit under MCL 208.1437(10) must continue to file and pay under the MBT until the certificated credit, and any carryforward of the credit, are used up, once the election is made. MCL 208.1510(2), (3).