Michigan House Bill HB4367

Michigan 2023-2024 Regular Session

• Introduced: 4/11/23
• Refer: 4/11/23

Caption

Corporate income tax: credits; credit for qualified research and development expenses; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 672. TIE BAR WITH: HB 4368'23

Impact

This legislation is designed to stimulate the research and development sector in Michigan, encouraging businesses to invest in innovative projects that can drive economic growth. By providing a fiscal incentive, the bill aims to enhance the state's competitiveness in attracting and retaining firms engaged in cutting-edge research. This change is expected to encourage both local and out-of-state businesses to expand their operations in Michigan, potentially leading to job creation and advances in technology.

Summary

House Bill 4367 amends the Income Tax Act of 1967 by adding a new section that introduces a tax credit for taxpayers who incur qualified research and development expenses in Michigan. Taxpayers can claim a credit equal to 15% of their eligible expenses, with a maximum limit of $2,000,000 per taxpayer per year. Additionally, the total credits available to all taxpayers within a single year is capped at $500,000,000. If the total claims exceed this cap, the credits will be proportionately reduced for all claimants.

Contention

Notably, the bill ties its provisions to the enactment of additional related legislation (HB 4368), indicating a strategic legislative approach to ensure comprehensive support for research initiatives. Opponents might argue about the implications of tax incentives on state budget revenues and whether such credits yield a net benefit to the community or merely subsidize companies that would conduct research regardless of the credit. Discussions could explore concerns about fairness in tax benefits and the need for oversight to ensure the funds are effectively utilized.