Bill > HB5978

This bill proposes to amend the Income Tax Act of 1967 in Michigan by adding two new sections, 277 and 677. The key provisions of the bill are: 1. It allows qualified taxpayers, which are defined as businesses primarily engaged in defense contracting, aerospace defense, aerospace equipment manufacturing, or other aerospace and defense technology activities, as well as certain tier 1, 2, or 3 defense/aerospace suppliers with less than $5 million in annual gross revenue, to claim a tax credit equal to 20% of their research and development expenses incurred in Michigan that exceed a base amount. The Michigan Strategic Fund is limited to approving and certifying up to $100 million in total tax credits for this provision across a single calendar year. 2. It also allows qualified taxpayers, subject to certain limitations, to claim a tax credit equal to 20% of their expenses incurred for the storage and maintenance of their finished goods inventory. The Michigan Strategic Fund is limited to approving and certifying up to $25 million in total tax credits for this provision across a single calendar year. 3. The bill requires the Department of Treasury, in cooperation with the Michigan Strategic Fund, to submit an annual report to the legislature and other state officials on the operation and effectiveness of these new research and development tax credits. The bill is tied to the enactment of House Bill 5979 of the 102nd Legislature.

Budget and Finance

https://legislature.mi.gov/Bills/Bill?ObjectName=2024-HB-5978