2003 House Bill 4565 / Public Act 45

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Introduced in the House

April 10, 2003

Introduced by Rep. Barbara Farrah (D-13)

To expand non-resident income tax liabilities by requiring "flow-through entities" such as limited liability companies, partnerships, limited liability partnerships, limited partnerships, and “S” corporations, with non-resident individuals as members, partners and shareholders, to file composite income tax returns and pay the tax on distributive income for their members, partners and shareholders. House Bills 4558 to 4565 would amend various sections of the Income Tax Act to accomplish this. This bill is one of many authorizing “revenue enhancements” which Gov. Jennifer Granholm has proposed to close a gap between state spending and expected revenue in the Fiscal Year 2003-2004 budget.

Referred to the Committee on Tax Policy

May 7, 2003

Reported without amendment

With the recommendation that the substitute (H-1) be adopted and that the bill then pass.

May 8, 2003

Substitute offered

To replace the previous version of the bill with one which slightly narrows its scope to exclude publicly traded partnerships.

The substitute passed by voice vote

Passed in the House 91 to 10 (details)

To collect more Michigan income tax from non-resident members, partners and shareholders of certain limited liability companies, partnerships, and “S” corporations. This bill is one of many authorizing “revenue enhancements” which Gov. Jennifer Granholm has proposed to close a gap between state spending and expected revenue in the Fiscal Year 2003-2004 budget.

Received in the Senate

May 13, 2003

Referred to the Committee on Finance

June 3, 2003

Reported without amendment

With the recommendation that the bill pass.

June 4, 2003

Amendment offered

To tie-bar the bill to House Bill 4561, which deals with flow-through entities which own casinos or racetracks.

The amendment passed by voice vote

June 5, 2003

Passed in the Senate 36 to 2 (details)