Tax News

CCH (cch.taxgroup.com) reports:

The Michigan House of Representatives has passed a bill that would impose an annual surcharge to the Michigan business tax. The surcharge would be based on a percentage of the taxpayer's liability before credits. For all taxpayers, other than financial institutions, the surcharge would be:
-- 32.9% for tax years ending after 2007 and before 2009; and
-- 27.3% for tax years ending after 2008.
For financial institutions taxpayers, subject to the franchise tax, the surcharge would be:
-- 27.7% for tax years ending after 2007 and before 2009; and
-- 23.4% for tax years ending after 2008.
The surcharge would be capped at $2 million per year and would not apply to insurance companies subject to the gross direct premiums tax. The bill also would allow financial institutions to claim the compensation and investment tax credits.
Finally, the bill would revise the provisions that authorize a tax refund if the state collects taxes above certain threshold amounts. Half of the excess taxes would no longer be deposited into the countercyclical budget and economic stabilization fund and taxpayers would be eligible for pro rata refunds based on the amount of the surcharge.
The bill would be effective January 1, 2008, and would apply to all business activity occurring after December 31, 2007. The bill would repeal the new use tax on selected services. The possible repeal of the use tax on selected services has been previously reported. (TAXDAY, 2007/11/09, S.8)
Subscribers to CCH Tax Research NetWork may view H.B. 5408.
H.B. 5408, as passed by the Michigan House of Representatives, November 8, 2007.