Individual income tax: credit; credit for certain investments in Michigan businesses; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 280.
As part of the legislative process, the Michigan Strategic Fund is tasked with creating an application and approval process to certify investments, ensuring compliance with relevant state and federal regulations. This level of oversight underscores the state's commitment to fostering responsible economic development while managing potential risks associated with tax credits.
The legislation primarily impacts state income tax regulations, incentivizing local investments through tax credits. It designates that only investments certified by the Michigan Strategic Fund will qualify for these credits. Essentially, this measure seeks not only to bolster individual businesses but also aims to retain revenues within Michigan, as businesses that qualify must be clearly defined as operating primarily within the state. By providing financial relief to individuals making such investments, HB4691 aims to foster a more vibrant economic landscape throughout Michigan.
House Bill 4691 proposes an amendment to the Income Tax Act of 1967, instituting a tax credit for qualified investments made in Michigan businesses. The bill allows taxpayers to claim a credit equal to 50% of their qualified investments during a tax year, with a cap of $3,000 for investments into any single qualified business and a total of $3,000 for all qualified investments across businesses within a year. The initiative aims to stimulate investment in local enterprises, thereby encouraging economic growth in the state of Michigan.
There may be varying opinions regarding this bill, particularly around the stipulations that define a 'qualified business' and the potential financial implications for the state budget. Some legislators may argue that limiting tax credits to only certain qualified businesses could favor larger enterprises over small businesses, thereby creating a competitive disadvantage in accessing state tax relief measures. Conversely, supporters could assert that defining strict qualification criteria helps to focus the benefits on businesses that are more likely to contribute positively to the state’s economy.