An act to amend 1967 PA 281, entitled “An act to meet deficiencies in state funds by providing for the imposition, levy, computation, collection, assessment, reporting, payment, and enforcement by lien and otherwise of taxes on or measured by net income and on certain commercial, business, and financial activities; to prescribe the manner and time of making reports and paying the taxes, and the functions of public officers and others as to the taxes; to permit the inspection of the records of taxpayers; to provide for interest and penalties on unpaid taxes; to provide exemptions, credits, rebates, and refunds of the taxes; to create certain funds; to provide for the expenditure of certain funds; to impose certain duties and requirements on certain officials, departments, and authorities of this state; to prescribe penalties for the violation of this act; to provide an appropriation; and to repeal acts and parts of acts,” by amending sections 12, 607, 699, 701, 805, and 845 (MCL 206.12, 206.607, 206.699, 206.701, 206.805, and 206.845), sections 12 and 607 as amended by 2018 PA 38, section 699 as added by 2011 PA 309, section 701 as amended by 2022 PA 148, and sections 805 and 845 as added by 2021 PA 135, and by adding section 339.
The legislative text introduces amendments to the Income Tax Act of 1967, specifically targeting sections 12, 607, 699, 701, 805, and 845, and adding section 339. The primary objective of these amendments is to redefine certain tax-related terms and classifications, particularly concerning flow-through entities and their treatment under state tax law. A significant change is the introduction of section 339, which stipulates that entities converting into limited liability companies under specific conditions will be treated as corporations for state tax purposes unless they are disregarded entities for federal tax purposes. This change aims to align state tax treatment with federal tax classifications, ensuring consistency in tax obligations. Additionally, the amendments clarify the definition of "federal taxable income" by excluding certain sections of the Internal Revenue Code from consideration, thereby potentially altering the taxable income calculations for affected entities. The legislation also modifies the treatment of foreign operating entities by updating the reference to the Internal Revenue Code section that defines active foreign business income. These changes reflect an effort to streamline tax regulations and ensure that state tax laws are in harmony with federal tax codes. The enactment of this legislation is contingent upon the passage of related bills, Senate Bill Nos. 982, 983, and 984, indicating a broader legislative effort to reform tax laws comprehensively.
Introduced
by
Referred to the Committee on Regulatory Affairs
Reported without amendment
Referred to the Committee of the Whole
Reported without amendment
Passed in the Senate 37 to 0 (details)
Referred to the Committee on Regulatory Reform
Referred to the Committee on Government Operations
Reported without amendment
Passed in the House 103 to 2 (details)
Motion to give immediate effect
by
The motion prevailed by voice vote
Motion to give immediate effect
by
The motion prevailed by voice vote
