SB 1083

SENATE BILL NO. 1083
A bill to amend 1941 PA 122, entitled
"An act to establish the revenue collection duties
of the department of treasury; to prescribe its powers and duties as the
revenue collection agency of this state; to prescribe certain powers and duties
of the state treasurer; to establish the collection duties of certain other
state departments for money or accounts owed to this state; to regulate the
importation, stamping, and disposition of certain tobacco products; to provide
for the transfer of powers and duties now vested in certain other state boards,
commissions, departments, and offices; to prescribe certain duties of and
require certain reports from the department of treasury; to provide procedures
for the payment, administration, audit, assessment, levy of interests or
penalties on, and appeals of taxes and tax liability; to prescribe its powers
and duties if an agreement to act as agent for a city to administer, collect,
and enforce the city income tax act on behalf of a city is entered into with
any city; to provide an appropriation; to abolish the state board of tax
administration; to prescribe penalties and provide remedies; and to declare the
effect of this act,"
by amending section 30 (MCL 205.30), as amended by 2016
PA 267.
the people of the state of michigan enact:
Sec. 30. (1) The department shall credit or refund an
overpayment of taxes; taxes, penalties, and interest erroneously assessed and
collected; and taxes, penalties, and interest that are found unjustly assessed,
excessive in amount, or wrongfully collected with interest at the rate
calculated under section 23 for deficiencies in tax payments.
(2) A taxpayer who
paid a tax that the taxpayer claims is not due may petition the department for
refund of the amount paid within the time period specified as the statute of
limitations in section 27a. If a tax return reflects an overpayment or credits in
excess of the tax, the declaration of that fact on the return constitutes a
claim for refund. If the department agrees the claim is valid, the amount of
overpayment, penalties, and interest shall be first applied to any known
liability as provided in section 30a, and the excess, if any, shall be refunded
to the taxpayer or credited, at the taxpayer's request, against any current or
subsequent tax liability. Except claims for refunds, other than those made
under part 1 of the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532,
that have not been approved, denied, or adjusted within 1 year of the date
received may be treated as denied at the election of the taxpayer, and may be
appealed by the taxpayer in accordance with section 22.
(3) The department
shall certify a refund to the state disbursing authority who shall pay the
amount out of the proceeds of the tax in accordance with the accounting laws of
the state. Interest at the rate calculated under section 23 for deficiencies in
tax payments regarding those refunds shall be added to the refund commencing 45 30 days after
the claim is filed or 45 30 days after the date established by law for the
filing of the return, whichever is later. Interest on refunds intercepted and
applied as provided in section 30a shall cease as of the date of interception.
Refunds for amounts of less than $1.00 shall not be paid.
(4) Beginning
January 1, 2014 through December 31, 2024, in
addition to and separate from the interest added to a refund under subsection
(3), for refunds for taxes imposed under part 1 of the income tax act of 1967,
1967 PA 281, MCL 206.1 to 206.532, the state disbursing authority shall add
interest to refunds that are not paid within 1 of the following dates for the
applicable tax year:
(a) May 1, for
returns received by the department on or before March 1 of the applicable tax
year.
(b) Sixty days from
the date the return was received by the department for returns received by the
department after March 1 of the applicable tax year.
(5) Interest
described in subsection (4) shall be paid at a rate of 3% per annum, calculated
from the date the original return was due under section 315(1) of the income
tax act of 1967, 1967 PA 281, MCL 206.315, and until a date preceding the date
of the refund by not more than 7 days, if all of the following conditions are
met:
(a) The refund is
due on an original return which was timely filed under section 315(1) of the
income tax act of 1967, 1967 PA 281, MCL 206.315.
(b) The refund is
not adjusted by the department.
(c) The return is
not subject to section 27a(3) or (4) except for audit by the department.
(d) The return is
complete for processing purposes with no calculation errors and contains all
required information as prescribed by the department under section 315(1)(d) of
the income tax act of 1967, 1967 PA 281, MCL 206.315, including any state and federal
returns, forms, or schedules necessary to process the return.
(e) The taxpayer
who has filed a complete return under subdivision (d) has complied with the
department's request, if any, for additional documentation or information
within 30 days of that request.
(f) No portion of
the refund is subject to interception under section 30a.
(g) The amount to
be refunded is more than $1.00.
(6) Beginning January 1, 2025 and subject to subsection (7), in addition
to and separate from the interest added to a refund under subsection (3), for
refunds for taxes imposed under part 1 of the income tax act of 1967, 1967 PA
281, MCL 206.1 to 206.532, the state disbursing authority shall add interest to
refunds that are not paid as follows in the following circumstances:
(a) Within 30 days from the date the return was received by the
department, interest must be paid at 1 percentage point above the adjusted
prime rate per annum calculated from day 31, until a date preceding the date of
the refund but for not more than 30 days.
(b) Within 60 days from the date the return was received by the
department, in addition to the interest added under subdivision (a), interest
must be paid at 3 percentage points above the adjusted prime rate per annum
calculated from day 61, until a date preceding the date of the refund but for
not more than 30 days.
(c) Within 90 days from the date the return was received by the
department, in addition to the interest added under subdivisions (a) and (b),
$100.00 must be added to the refund.
(7) Interest described under subsection (6) must not be applied
beginning on day 31 following the date the return was received by the
department if the delay is a result of the department investigating a suspected
fraudulent claim, needing to verify identification, or finding material errors
in the return, or the return was not filed in a timely manner under section
315(1) of the income tax act of 1967, 1967 PA 281, MCL 206.315, and the
department has sent a written notice to the taxpayer before day 31 specifying
the reason for the delay. Except as otherwise provided under this subsection,
interest must be paid as provided under subsection (6) if all of the following
conditions are met:
(a) The refund is due on an original return which was timely filed under
section 315(1) of the income tax act of 1967, 1967 PA 281, MCL 206.315.
(b) The refund is not adjusted by the department.
(c) The return is complete for processing purposes with no calculation
errors and contains all required information as prescribed by the department
under section 315(1)(d) of the income tax act of 1967, 1967 PA 281, MCL
206.315, including any state and federal returns, forms, or schedules necessary
to process the return.
(d) The taxpayer who has filed a complete return under subdivision (c)
has complied with the department's request, if any, for additional
documentation or information within 30 days of that request.
(e) The amount to be refunded is more than $1.00.
(8) (6) Beginning January 1, 2015, in In addition to and separate from the interest
added to a refund under subsection (3), for refunds for taxes imposed under the
Michigan business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, 208.1519, the
state disbursing authority shall add interest to refunds that are not paid
within 90 days after the claim is approved or 90 days after the date
established by law for filing the return, whichever is later. Interest
described in this subsection shall must be paid at a rate of 3% per annum for each day
the refund is not issued within the time frame required in this subsection if
all of the following conditions are met:
(a) The refund is
claimed on an original return which was timely filed under section 505(1) of
the Michigan business tax act, 2007 PA 36, MCL 208.1505.
(b) The refund is
not adjusted by the department.
(c) The refund is
not claimed by a taxpayer filing as a unitary business group.
(d) The return is
not subject to section 27a(3) or (4) except for audit by the department.
(e) The return is
complete for processing purposes with no calculation errors and contains all
required information as prescribed by the department under section 507 or 509
of the Michigan business tax act, 2007 PA 36, MCL 208.1507 and 208.1509,
including any state and federal returns, forms, or schedules necessary to
process the return.
(f) The taxpayer
who has filed a complete return under subdivision (e) has complied with the
department's request, if any, for additional documentation or information
within 30 days of that request.
(g) No portion of
the refund is subject to interception under section 30a.
(h) The amount to
be refunded is more than $10.00.
(9) (7) Beginning January 1, 2017, the The interest calculations in subsections (3), (4), (5), and (6) under this section also apply to refunds of credits
authorized under section 36109 of the natural resources and environmental
protection act, 1994 PA 451, MCL 324.36109, for contracts that have been
approved and processed by the department of agriculture and rural development
and forwarded to the department. If the state disbursing authority does not pay
or refund a credit described in this subsection within 45 days from the date
the return was received by the department, the department shall notify the
taxpayer of the status of the return and whether the taxpayer has filed a
complete return.
(10) Beginning 30 days after the effective date of the amendatory act
that added this subsection, the department shall submit a monthly report to the
legislature detailing refund processing times, backlog volumes, and the number
of returns for which additional interest and payments were required under this
section for the failure to process and issue the refund within the specified
time frames.
(11) As used in this section, "adjusted prime rate" means that
term as defined in section 23.