2003 Senate Bill 866

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Introduced in the Senate

Dec. 2, 2003

Introduced by Sen. Cameron Brown (R-16)

To exempt the owner of a "qualified start-up business" from paying a city income tax on earnings from the enterprise for five years. A "qualified start-up business" is defined as a firm that has fewer than 25 full-time equivalent employees, has annual sales of less than $1 million, has research and development expenses that make up at least 15-percent of its annual expenses, and is not publicly traded. This does not necessarily apply only to new firms, and the five year exemption is not necessarily the firm's first five years of operation.

Referred to the Committee on Finance

Dec. 10, 2003

Referred to the Committee on Economic Development, Small Business, and Regulatory Reform

Dec. 30, 2003

Reported without amendment

With the recommendation that the bill pass.

Feb. 10, 2004

Substitute offered

To replace the previous version of the bill with one that somewhat narrows the definition of qualified start up business to only include firms that did not have net income for two consecutive tax years.

The substitute passed by voice vote

Feb. 11, 2004

Amendment offered by Sen. Martha G. Scott (D-2)

To allow local governments that levy income taxes to not exempt a qualified start-up business from the paying the local tax that would otherwise be exempted under the bill.

The amendment failed 14 to 24 (details)

Amendment offered by Sen. Cameron Brown (R-16)

To establish that if the qualified start-up business leaves Michigan within three years after getting the tax credit, it must pay a proportional amount of the taxes it would have paid without the credit.

The amendment passed by voice vote

Passed in the Senate 32 to 6 (details)

To exempt the owner of a "qualified start-up business" from paying a city income tax on earnings from the enterprise for five years. A "qualified start-up business" is defined as a firm that has fewer than 25 full-time equivalent employees, has annual sales of less than $1 million, has research and development expenses that make up at least 15-percent of its annual expenses, is not publicly traded, and did not have net income for two consecutive tax years. This does not necessarily apply only to new firms, and the proposed five year exemption is not necessarily the firm's first five years of operation.

Received in the House

Feb. 11, 2004

Referred to the Committee on Commerce

Feb. 12, 2004

Referred to the Committee on Tax Policy