Michigan Senate Bill SB0438

Michigan 2023-2024 Regular Session

• Introduced: 6/28/23
• Refer: 6/28/23

Caption

Corporate income tax: credits; film incentive credit; restore. Amends secs. 701 & 703 of 1967 PA 281 (MCL 206.701 & 206.703) & adds secs. 285 & 677. TIE BAR WITH: SB 0439'23

Impact

The introduction of these tax incentives is expected to stimulate job creation within the film industry and related sectors in Michigan. The bill mandates that a significant portion of the tax credits be awarded based on local expenditures, thereby ensuring that the economic benefits of film productions are retained within the state. Moreover, the legislation emphasizes periodic evaluations of the credit program's effectiveness, allowing for adjustments to be made based on observed economic impacts and job creation statistics. This may lead to increased investment in local vendors and service providers, further enhancing community engagement and economic growth.

Summary

Senate Bill 438 seeks to amend the Income Tax Act of 1967, particularly enhancing the film incentive program in Michigan. The bill adds new sections that outline a framework for state-certified qualified productions to claim tax credits based on their expenditures in Michigan. Key components include defining what constitutes a 'qualified production' and establishing processes for applicants to secure tax credits against their corporate income tax liabilities. By focusing on attracting film and media projects, the legislation aims to bolster local economic activity and promote Michigan as a competitive location for film production.

Contention

Despite its potential benefits, SB 438 has faced criticism from various stakeholders who argue that such tax incentive programs can lead to revenue losses for the state. Opponents express concerns that funds allocated to tax incentives could be better utilized in other public services such as education or infrastructure. Additionally, there is skepticism about the actual job creation numbers and economic benefits compared to the anticipated costs. Some legislators worry that without strict oversight, the program could be subject to misuse or fail to deliver the promised economic returns.