Bill > SB0557

This bill creates two new tax credit provisions for businesses located in or planning to relocate to an aerospace defense zone in Michigan during tax years 2026-2029. The first provision allows qualified businesses in defense contracting, aerospace defense, or related industries to claim a 30% tax credit for research and development expenses exceeding their base amount, with a total statewide credit cap of $100 million per year and a maximum of $10 million per taxpayer. The second provision offers a 20% tax credit for expenses related to storing and maintaining finished goods inventory, with a total statewide credit cap of $25 million per year and a maximum of $1 million per taxpayer. Eligibility is limited to businesses designated by the Michigan Strategic Fund as either primary aerospace/defense businesses or small defense suppliers (under $5 million in annual revenue). To claim the credits, businesses must obtain a certificate from the Michigan Strategic Fund and attach it to their tax return, and any unused credits can be carried forward to offset future tax liability. Additionally, the bill requires an annual report to the legislature detailing the program's effectiveness, including the number of businesses applying and the specific tax credits claimed. The credits are designed to incentivize research, development, and business growth in Michigan's aerospace and defense sectors.

Budget and Finance

https://legislature.mi.gov/Bills/Bill?ObjectName=2025-SB-0557