Michigan House Bill HB4816

Michigan 2025-2026 Regular Session

• Introduced: 8/26/25
• Refer: 8/26/25
• Report Pass: 11/4/25
• Report Pass: 4/16/26

Caption

Individual income tax: credit; credit for certain investments in Michigan businesses; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 281.

Impact

The bill is intended to encourage investment within the state by providing financial incentives for taxpayers who support local businesses. By allowing tax credits, the legislation aims to stimulate economic development, particularly targeting businesses with significant operations in Michigan. The state government expresses the intent to allocate sufficient funds to compensate for any resulting revenue loss from these tax credits, indicating a commitment to maintain financial stability despite the potential decrease in immediate tax income.

Summary

House Bill 4816 proposes an amendment to the Income Tax Act of 1967 to introduce tax credits for individuals or entities making qualified investments in certified Michigan businesses. Beginning with the tax years starting January 1, 2025, taxpayers will be eligible to claim a credit of 50% of their investment amount, capped at $3,000 per qualified business and for total investments across all businesses in a given tax year. The Michigan strategic fund will oversee the certification process to ensure eligibility for the tax credits, which mandates certain conditions for defined 'qualified investments' and 'qualified businesses.'

Contention

Critics may raise concerns about the limitations imposed by the bill, particularly regarding the qualifications set forth for investments and the amount of credits available. As the bill restricts eligibility to investments in businesses certified by the Michigan strategic fund, some may argue that this could create an unequal playing field, where not all businesses can benefit equally from the proposed tax incentives. Additionally, there may be apprehensions about the long-term financial implications of implementing such tax credits and whether the state can afford to maintain these programs sustainably without harming essential services.