Michigan Senate Bill SB0115

Michigan 2025-2026 Regular Session

• Introduced: 3/5/25
• Refer: 3/5/25

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 will have significant implications for state tax laws, particularly in how it interfaces with the Michigan strategic fund, which is tasked with certifying both the investments and the businesses eligible for these credits. By doing this, the law is anticipated to direct funds towards locally-owned enterprises, thereby enhancing the economic landscape of Michigan. However, the requirement for certification and adherence to certain parameters may also discourage potential investors due to the bureaucratic processes involved.

Summary

Senate Bill 115 aims to amend the Income Tax Act of 1967 by introducing a new section that allows taxpayers making qualified investments in certified qualified businesses to claim a tax credit. This tax credit amounts to 50% of the qualified investment, limited to a maximum of $3,000 per taxpayer per qualified business and for all qualified businesses in any given tax year. The bill seeks to incentivize investment in local businesses, aiming to boost economic growth within Michigan by providing these financial benefits to investors starting from tax years after January 1, 2025.

Contention

Points of contention around SB 115 could arise concerning the particulars of the qualifying criteria and the defined roles for the Michigan strategic fund. There may be concerns regarding fairness in how investments are certified and which businesses gain qualification. Critics could argue that the bill allows for somewhat subjective determinations of what constitutes a qualified business, potentially leading to disputes regarding eligibility and compliance. Furthermore, the reliance on the Michigan strategic fund's discretion could result in disparities in how this legislation is applied across different sectors and communities.