Michigan House Bill HB5102

Michigan 2023-2024 Regular Session

• Introduced: 10/5/23
• Refer: 10/5/23
• Report Pass: 10/25/23
• Engrossed: 10/31/23
• Refer: 11/1/23
• Report Pass: 3/19/24
• Enrolled: 4/10/24
• Chaptered: 7/30/24
• Passed: 7/30/24

Caption

Corporate income tax: credits; annual report on research and development tax credits; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 718.

Impact

By instituting a requirement for annual reporting on the effectiveness of R&D tax credits, HB 5102 could significantly change how these financial incentives are applied in Michigan. It emphasizes the need for data-driven evaluations of tax policies intended to support economic development. As such, this bill could lead to adjustments and improvements in how tax credits are managed, potentially increasing their effectiveness in promoting research and development activities in Michigan. This could ultimately help foster an environment more conducive to innovation and business growth in the state.

Summary

House Bill 5102 amends the 1967 PA 281 Act, specifically adding a new section, which mandates an annual report concerning the operation and effectiveness of the research and development tax credits. This report is to be submitted by the Michigan Department in collaboration with the board of directors of the Michigan Strategic Fund to various state officials, including lawmakers and the governor. The bill aims to enhance transparency and accountability in the administration of these tax credits which are intended to stimulate innovation within the state's economy.

Sentiment

The sentiment surrounding HB 5102 appears generally supportive, particularly among those who advocate for robust economic development and innovation strategies. Proponents highlight the importance of evaluating the efficacy of tax credits to ensure resources are allocated properly and to foster a climate of accountability. However, there may be concerns from those who fear the administrative burden that reporting might impose on businesses, even as the intention is to streamline and improve the oversight of tax incentives.

Contention

While the bill predominantly received support, it did spark some debate regarding its implications for businesses claiming these tax credits. Detractors expressed concerns that the additional reporting requirements could create obstacles for smaller entities unable to readily comply with more rigorous administrative obligations. Proponents countered that the benefits of enhanced oversight and accountability would ultimately outweigh the challenges posed to businesses, ensuring that the intended economic benefits of the tax credits are realized and well-documented.