Bill > HB5100

This bill establishes a new corporate income tax credit for businesses that invest in research and development (R&D) within Michigan, effective for tax years beginning on or after January 1, 2025. An "authorized business" is defined as a company that incurs qualifying R&D expenses above a certain "base amount," which is the average of their R&D spending over the previous three years. The credit amount varies based on the size of the business: companies with 250 or more employees can receive a credit of 3% on R&D expenses up to their base amount and 10% on expenses exceeding the base amount, capped at $2 million annually, while smaller businesses with fewer than 250 employees get 3% up to the base amount and 15% above it, capped at $250,000 annually. An additional credit of 5% is available for R&D expenses incurred in collaboration with a Michigan research university, up to $200,000 per year. To claim these credits, businesses must first submit a tentative claim by specific deadlines, and the total amount of credits claimed by all businesses under this section and a related section (717) is capped at $100 million annually; if claims exceed this cap, the credits will be prorated. "Qualifying research and development expenses" are defined by federal tax law (section 41(b) of the internal revenue code) but are limited to research conducted within Michigan. The bill also repeals a previous section of the tax act (section 716).