SB 967

SENATE BILL NO. 967
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
(MCL 206.1 to 206.847) by adding sections 279, 679, and
821.
the people of the state of michigan enact:
Sec. 279. (1)
Subject to subsection (2), for tax years that begin on and after January 1,
2027, a qualified taxpayer may claim a state low-income housing tax credit
against the tax imposed under this part in an amount equal to the amount
allocated to the taxpayer for the tax year as provided on the eligibility
certificate and reported on the allocation form. The qualified taxpayer must
attach a copy of the allocation form for that calendar year to the annual
return filed under this part for the same tax year on which a credit under this
section is being claimed. A qualified taxpayer is not eligible to claim a
credit under this section for any tax year unless that taxpayer and the amount
of the credit allocated to that taxpayer is listed on the allocation form
attached to the annual return for that tax year.
(2) If any portion of the federal credit allocated to a qualified
project for which a state low-income housing credit is also claimed under this
section, is recaptured under section 42(j) of the internal revenue code, 26 USC
42, or is otherwise disallowed, the department, in consultation with the
authority, shall recapture a proportionate amount of the tax credit claimed under
this section in connection with the same qualified project. If the department,
in consultation with the authority, determines to recapture the tax credit, the
department and authority shall determine the taxpayer or taxpayers that claimed
the credit, the tax against which the credit was claimed, and the amount to be
recaptured from each respective taxpayer and have that recaptured amount added
back to the tax liability of those taxpayers under this part. The statute of
limitations on assessments under this act does not bar an assessment made under
this subsection.
(3) The credit allowed under this section must be claimed after all
other credits allowed under this part. If the credit allowed under this section
for the tax year and any unused carryforward of the credit allowed by this
section exceed the qualified taxpayer's tax liability for the tax year, that
portion that exceeds the tax liability for the tax year must not be refunded
but may be carried forward to offset tax liability in subsequent tax years for 10
years or until used up, whichever occurs first. If a qualified taxpayer has an
unused carryforward of a credit under this section, the amount otherwise added
under subsection (2) to the qualified taxpayer's tax liability may instead be
used to reduce the qualified taxpayer's carryforward under this section.
(4) As used in this section:
(a) "Allocation form" means the form submitted by the
designated reporter under 22e(11) of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1422e.
(b) "Authority" means the Michigan state housing development
authority created under section 21 of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1421.
(c) "Designated reporter", "eligibility
certificate", "equity owner", and "project owner" mean
those terms as defined under section 22e of the state housing development
authority act of 1966, 1966 PA 346, MCL 125.1422e.
(d) "Qualified
taxpayer" means a taxpayer that is the project owner or an equity owner
that has been allocated a state low-income housing tax credit.
(e)
"State low-income housing tax credit" means a credit reserved under
section 22e of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e.
Sec. 679. (1) Subject to subsection (2), for tax years that begin on
and after January 1, 2027, a qualified taxpayer may claim a state low-income
housing tax credit against the tax imposed under this part in an amount equal
to the amount allocated to the taxpayer for the tax year as provided on the
eligibility certificate and reported on the allocation form. The qualified
taxpayer must attach a copy of the allocation form for that calendar year to
the annual return filed under this part for the same tax year on which a credit
under this section is being claimed. A qualified taxpayer is not eligible to
claim a credit under this section for any tax year unless that taxpayer and the
amount of the credit allocated to that taxpayer is listed on the allocation form
attached to the annual return for that tax year.
(2) If any portion of the federal credit allocated to a qualified
project for which a state low-income housing credit is also claimed under this
section is recaptured under section 42(j) of the internal revenue code, 26 USC
42, or is otherwise disallowed, the department, in consultation with the
authority, shall recapture a proportionate amount of the tax credit claimed under
this section in connection with the same qualified project. If the department,
in consultation with the authority, determines to recapture the tax credit, the
department and authority shall determine the taxpayer or taxpayers that claimed
the credit, the tax against which the credit was claimed, and the amount to be
recaptured from each respective taxpayer and have that recaptured amount added
back to the tax liability of those taxpayers under this part. The statute of
limitations on assessments under this act does not bar an assessment made under
this subsection.
(3) The credit allowed under this section must be claimed after all
other credits allowed under this part. If the credit allowed under this section
for the tax year and any unused carryforward of the credit allowed by this
section exceed the qualified taxpayer's tax liability for the tax year, that
portion that exceeds the tax liability for the tax year must not be refunded
but may be carried forward to offset tax liability in subsequent tax years for 10
years or until used up, whichever occurs first. If a qualified taxpayer has an
unused carryforward of a credit under this section, the amount otherwise added
under subsection (2) to the qualified taxpayer's tax liability may instead be
used to reduce the qualified taxpayer's carryforward under this section.
(4) As used in this section:
(a) "Allocation form" means the form submitted by the
designated reporter under 22e(11) of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1422e.
(b) "Authority" means the Michigan state housing development
authority created under section 21 of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1421.
(c) "Designated reporter", "eligibility
certificate", "equity owner", and "project owner" mean
those terms as defined under section 22e of the state housing development
authority act of 1966, 1966 PA 346, MCL 125.1422e.
(d) "Qualified
taxpayer" means a taxpayer that is the project owner or an equity owner
that has been allocated a state low-income housing tax credit.
(e)
"State low-income housing tax credit" means a credit reserved under
section 22e of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e.
Sec. 821. (1)
Subject to subsection (2), for tax years that begin on and after January 1,
2027, a qualified taxpayer may claim a state low-income housing tax credit
against the tax imposed under this part in an amount equal to the amount
allocated to the taxpayer for the tax year as provided on the eligibility
certificate and reported on the allocation form. The qualified taxpayer must
attach a copy of the allocation form for that calendar year to the annual
return filed under this part for the same tax year on which a credit under this
section is being claimed. A qualified taxpayer is not eligible to claim a
credit under this section for any tax year unless that taxpayer and the amount
of the credit allocated to that taxpayer is listed on the allocation form attached
to the annual return for that tax year.
(2) If any portion of the federal credit allocated to a qualified
project for which a state low-income housing credit is also claimed under this
section is recaptured under section 42(j) of the internal revenue code, 26 USC
42, or is otherwise disallowed, the department, in consultation with the
authority, shall recapture a proportionate amount of the tax credit claimed under
this section in connection with the same qualified project. If the department,
in consultation with the authority, determines to recapture the tax credit, the
department and authority shall determine the taxpayer or taxpayers that claimed
the credit, the tax against which the credit was claimed, and the amount to be
recaptured from each respective taxpayer and have that recaptured amount added
back to the tax liability of those taxpayers under this part. The statute of
limitations on assessments under this act does not bar an assessment made under
this subsection.
(3) The credit allowed under this section must be claimed after all
other credits allowed under this part. If the credit allowed under this section
for the tax year and any unused carryforward of the credit allowed by this
section exceed the qualified taxpayer's tax liability for the tax year, that
portion that exceeds the tax liability for the tax year must not be refunded
but may be carried forward to offset tax liability in subsequent tax years for 10
years or until used up, whichever occurs first. If a qualified taxpayer has an
unused carryforward of a credit under this section, the amount otherwise added
under subsection (2) to the qualified taxpayer's tax liability may instead be
used to reduce the qualified taxpayer's carryforward under this section.
(4) As used in this section:
(a) "Allocation form" means the form submitted by the
designated reporter under 22e(11) of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1422e.
(b) "Authority" means the Michigan state housing development
authority created under section 21 of the state housing development authority
act of 1966, 1966 PA 346, MCL 125.1421.
(c) "Designated reporter", "eligibility
certificate", "equity owner", and "project owner" mean
those terms as defined under section 22e of the state housing development
authority act of 1966, 1966 PA 346, MCL 125.1422e.
(d) "Qualified
taxpayer" means a taxpayer that is the project owner or an equity owner
that has been allocated a state low-income housing tax credit.
(e)
"State low-income housing tax credit" means a credit reserved under
section 22e of the state housing development authority act of 1966, 1966 PA
346, MCL 125.1422e.
Enacting section 1.
This amendatory act does not take effect unless all of the following bills of
the 103rd Legislature are enacted into law:
(a)    Senate Bill No. 966.
(b) Senate Bill No. 968.