Tax News

CCH (cch.taxgroup.com) reports:

The Michigan Senate 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 14% for tax years ending after December 31, 2007 and before January 1, 2011. The surcharge would be capped at $7.5 million per year.
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 and before 2011.
The surcharge would not apply to insurance companies subject to the gross direct premiums tax.
The statutory percentage limitations on the compensation tax credit, research and development tax credit, and the investment tax credit would apply only to the Michigan business tax and not to the surcharge. The bill also would allow financial institutions to claim the compensation tax credit.
The bill would be effective January 1, 2008, and would apply to all business activity occurring after December 31, 2007. The bill would be tied to another bill (S.B. 838) which would repeal the new use tax on selected services.
Subscribers to CCH Tax Research NetWork may view H.B. 5408.
 
H.B. 5408, as passed by Michigan Senate, November 20, 2007.