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Legislative Review Director Reports
March
3, 2005
I. PUBLIC ACTS
- Public Act 131 of 2003 . Revises the reference in
the Tax Tribunal Act from “homestead exemption” to “principal residence exemption”.
Effective January 1, 2004. See also Public Act 140 of 2003 which revises
the General Property Tax Act to replace the term “homestead” with
the term “principal residence.” Various other statutes have been/may
be amended to revise the definition of “homestead exemption” to “principal
residence exemption.” Effective January 1, 2004.
- Public Act 215 of 2003 : Repeals Public Act 285 of
1925 and creates the “Credit
Union Act” to provide for the regulation of credit unions.
Effective June 1, 2004
- Public Act 265 of 2003 : Amends the Michigan Broadband
Development Authority Act to require that priority be given to
the application of any broadband developer who applied to develop broadband
capability within a “recovery
zone” designated in the Michigan Renaissance Zone Act. Effective
January 5, 2004.
- Public Acts 266 and 273 of 2003 : Amends various
statutes to permit the designation of up to 20 tool and die renaissance
recovery zones, allows certain tool and die, machine tool and molding
companies to claim a single business tax credit of up to $4,000 for the
costs of training an apprentice, allows a taxpayer who purchased personal
property from a qualified tool and die business to claim an SBT credit
equal to the amount paid for the property, provides grants for broadband
infrastructure, expands personal property tax exemption for special tools,
provides that the depreciation of personal property used to develop tool
and die products could not be less than allowed under the Internal Revenue
Code, exempts from the use tax a construction contractor’s
labor cost to manufacture, fabricate, or assemble personal property
before affixing it to real property, and gives skilled trade associations
access to school facilities to provide information about apprenticeship
programs. Effective January 5, 2004 and January 8, 2004, respectively.
- Public Act 277 of 2003 : Amends the Brownfield Redevelopment
Financing Act to revise the Act’s definition of “initial taxable value”.
The bill would refer to the taxable value of eligible property identified
in a brownfield plan as shown either by the most recent
assessment roll (as currently provided) or, if provided by the brownfield
plan, by the next assessment roll for which equalization would be
completed following the date the resolution adding the property in
the plan was adopted. Effective January 8, 2004.
- Public Act 295 of 2003 : Amends the Income Tax Act
to allow an income tax credit, for tax years beginning after 2009
and before 2020, for a “claimant” or
for a taxpayer to whom a certificate and remaining single business
tax (SBT) credit amount had been transferred under the SBT Act. Effective
January 8, 2004.
- Public Act 296 of 2003 : Creates the “Michigan Early Stage Venture
Capital Investment Act” to require that, within one year after the
bill’s effective date, the “Michigan Early Stage Venture Capital
Investment Corporation” be established, a fund manager be hired, an
investment plan be established, and funds be solicited and available for
investment consistent with that plan. The Corporation would have to create
the “Michigan Early Stage Venture Capital Investment Fund”.
Money in the Fund could be invested in venture capital companies
to promote investment in qualified businesses. Also amends the
Single Business Tax Act to specify that, for tax years beginning
after 2008 and before 2020, a taxpayer that was an investor could
claim an SBT credit equal to the amount determined and certified
under Senate Bill 834. For tax years beginning after 2009, if a
credit against the SBT or a successor tax were not allowed, the
taxpayer could transfer the credit to a person who could claim
an income tax credit. The total amount of all certified SBT credits
for all taxpayers for all years could not exceed $150 million.
The total amount of all credits authorized for any one year could
not exceed $30 million. In addition, the Income Tax Act is amended
to provide that, for tax years beginning after 2009 and before
2020, a taxpayer to whom a certificate and remaining SBT credit
amount had been transferred could claim that credit against the
income tax. Effective January 8, 2004.
- Public Act 126 of 2004 : Adds section 31a to the Single Business Tax
Act, and states that a taxpayer that is a qualified start-up business
that does not have a profit under a tax year may claim a credit against
the tax imposed under the Act for that tax year and any of the four immediately
following tax years. Effective May 28, 2004.
- Public Act 212 of 2004 : Amends Section 9-501
of the Uniform Commercial Code (MCL 440.9501), requiring that
the Secretary of State provide written notice of the filing of financing
statements. Allows debtors named in fraudulent financing statements to
bring actions against those filing such statements. It also makes the filing
of fraudulent financing statements a misdemeanor punishable by imprisonment,
fines, or both. Effective July 14, 2004.
- Public Act 251 of 2004 : Amends the Obsolete Property Rehabilitation
Act to provide that, upon application for an exemption from the obsolete
properties tax by a qualified start-up business, the governing body
of a local tax collecting unit could adopt a resolution to exempt a rehabilitated
facility of the business from the collection of the tax in the same
manner and under the same terms and conditions as provided for the exemption
in PA 252 of 2004. Effective July 23, 2004.
- Public Act 252 of 2004 : Amends the General Property Tax Act to exempt
the real and personal property of a qualified start-up business
from taxes levied under the Act after December 31, 2004, for up to five
years, if the business applied for the exemption and the governing body
of the local tax collection unit or, for taxes levied by the county, the
County Board of Commissioners, adopted a resolution approving the exemption.
Effective July 23, 2004.
- Public Acts 302 and 301 of 2004 : Allows a taxpayer to claim a credit
against its SBT Tax in an amount equal to 50% of the fair market
value of an automobile donated by the taxpayer to a qualified organization
that intends to provide the automobile to a qualified recipient. Effective
July 23, 2004.
- Public Acts 312 and 313 of 2004 : Allows a taxpayer to claim a credit
against income tax in an amount equal to 50% of the fair market
value of an automobile donated to a qualified organization that intends
to provide the automobile to a qualified recipient. Effective August 27,
2004.
- Public Acts 321-324 of 2004 : The Acts were part of a package of bills
exempting qualified start-up businesses from certain taxes, with
local approval. PA 321 amends the Technology Park Development Act to
provide for an exemption from the technology park facilities tax, which
is levied upon every owner and every user or occupant, if known, of a facility
to which a certificate is issued under the Act. PA 322 amends the City
Utility Users Tax Act to exempt a qualified start-up business from the
tax imposed by the City of Detroit on intrastate telephone communications
services, electrical energy, steam and natural and artificial gas provided
by a public utility or a resale customer. PA 323 amends the Plant Rehabilitation
and Industrial Development Act to create an exemption from the industrial
facilities tax for a speculative building, new facility or replacement
facility owned or operated by a qualified start-up business. PA 324 amends
PA 189 of 1983 to allow an exemption, for taxes levied after December 31,
2004, for real and personal property of a qualified start-up business from
the lessee-user tax if the business applies for an exemption and the governing
body of the local tax collecting unit adopts a resolution approving the
exemption. Effective August 27, 2004.
- Public Act 461 of 2004 : Amends the Michigan Consumer
Protection Act to prohibit issuing or delivering to a consumer
a receipt that displayed any part of a credit or debit card’s expiration date or more than the last
four digits of the consumer’s account number, if a credit card
or debit card were used for payment in a consumer transaction. Effective
March 1, 2005.
- Public Act 462 of 2004 : Amends the Michigan Consumer Protection Act,
making it unlawful to require a consumer to disclose his or her
Social Security number as a condition of sale, unless the transaction involved
an extension of credit or disclosure was required or authorized by
law. Effective March 1, 2005.
- Public Act 471 of 2004 : Amends the Credit Union
Act to require domestic credit unions to follow generally accepted
accounting principles, extend certain requirements regarding credit union
directors and supervisory or credit committee members to members of other
credit union committees, reduce the minimum base fee used to determine
a credit union’s annual operating
fee, require consideration of certain factors in establishing interest rates
on loans, extend prohibitions against more favorable loan rates or terms
for credit union officials to people who had business relationships with
credit union officials, limit the amount a credit union can loan a borrower
or its affiliates, revise notice requirements for a credit union’s
conversion to another type of financial institution. Effective
December 28, 2004.
- Public Act 558 of 2004 : Amends PA 236 of 1961 ((MCL 600.934), to permit
non-residents of the United States to become members of the Michigan
State Bar. Effective January 3, 2005.
II. NEW BILLS AND STATUS OF PENDING BILLS
- Senate Bill 14 of 2005: Would amend the income tax act to provide a $1,000
tax credit to taxpayers purchasing alternative energy vehicles. The Bill was
referred to the Committee on Finance on January 12, 2005.
- Senate Bill 16 of 2005: Would introduce
the “Check Cashing Licensing
Act,” requiring any person or entity, with the exception of
certain banks, credit unions, and governmental entities, to obtain
a license under the Act before engaging in the business of check
cashing. The Bill was referred to the Committee on Banking and Financial
Institutions on January 12, 2005.
- Senate Bill 114 – 115 of 2005: Would
add provisions to the Business Corporation Act and Michigan Limited
Liability Act with regard to converting business entities, including
the transfer of any unexpired certificate of assumed name held by the converting
entity. Referred to the Committee on Commerce and Labor on February 1,
2005.
- Senate Bill 127 of 2005: Would introduce
the “Michigan Telecommunications
Act,” which would preclude cellular or mobile telecommunication
service providers from providing, selling or including customer numbers
with directory assistance without obtaining customer consent. Referred
to the Committee on Technology and Energy on February 1, 2005.
- Senate Bill 157 of 2005: Would amend the Single Business Tax Act to
include in the tax base any settlement amount paid pursuant to an agreement
with a state or federal governmental agency based on questionable practices
related to stock or securities transactions to the extent that amount
was deducted in determining taxable income. This would apply to tax years
beginning after December 31, 2003. Deductions taken in 2002 or 2003 tax
years would be added to 2004 tax year only. Referred to the Committee on
Finance on February 3, 2005.
- Senate Bill 164 of 2005: Would introduce
the “Deferred Deposit Loan
Act,” which requires a person or entity, with the exception
of certain banks, credit unions and governmental entities, to obtain
a license under the Act before providing deferred deposit loans for
consideration. Referred to the Committee on Banking and Financial
Institutions on February 3, 2005.
- Senate Bill 176: Would introduce the “Money Transmission Services
Act”, which regulates money transmission service businesses
and requires licensing of persons engaged in providing money transmission
services. Referred to Committee on Banking and Financial Institutions
on February 9, 2005.
- House Bill 4052 of 2005: Would prohibit the sale of cellular telephones
and pagers to certain minors without written parental consent and
prescribes civil sanctions. Referred to Committee on Judiciary on January
27, 2005.
- House Bill 4087 of 2005: Would enact the “Liquidation Sale Licensing
Act,” which would require one who intends to conduct a regulated sale
or advertises, represents or holds out that a sale of goods is an insurance,
bankruptcy, mortgage, insolvency, assignee’s, executor’s, administrator’s,
receiver’s, trustee’s, removal, or going-out-of-business
sale or a sale of damaged goods, to first obtain a license from the
county clerk. Referred to Committee on Regulatory Reform on February
1, 2005.
- House Bill 4128 of 2005: Would amend the Single Business Tax Act so
that, for a period of three consecutive tax years beginning with the first
year of operation, qualified businesses shall have no tax liability for
tax years beginning after December 31, 2005. Referred to Committee on Tax
Policy on February 1, 2005.
- House Bill 4232: Would amend the Michigan
Consumer Protection Act to require a seller of retail goods to
provide notice to consumers of the seller’s
return policy by posting the policy in a conspicuous place visible
to the public in the premises where the goods are sold and by printing
the return policy on the sale receipt. Referred to Committee on
Commerce on February 8, 2005.
- House Bills 4279 and 4280 of 2005: Would amend the Use Tax Act and General
Sales Tax Act to exempt previously owned vehicles from taxes levied
under the Acts. Referred to Committee on Tax Policy on February 15, 2005.
- House Bill 4343 of 2005: Would amend the
Consumer Mortgage Protection Act to change its name to the “Home Loan Protection Act” and
impose new restrictions on home loans. Referred to Committee on
Banking and Financial Services on February 17, 2005.
Respectfully submitted,
Eric I. Lark
Kerr, Russell and Weber, PLC
December 4,
2004
I. PUBLIC ACTS
- Public Acts 23-25 of 2003: Public Act 23 amends
Section 27a
of the Revenue Act (MCLA 205.27(a)) to provide that controlling, supervising,
or responsible officers, members, managers, or partners of a corporation,
limited liability company, limited liability partnership, partnership,
or limited partnership liable for taxes may be held personally liable
for failure to file required returns, notwithstanding dissolution of the
business entity. Public Acts 24 and 25 delete language in the General Sales
Tax Act (MCL 205.27(a)) and Use Tax Act (MCL 205.96) which is substantially
similar to the provision added to the Revenue Act. Effective June 24,
2003.
- Public Act 42 of 2003: Provides for the regulation
of the transmission of electronic mail advertisements. Effective September
1, 2003.
- Public Act 44 of 2003: This Act provides for the enforcement
of a security interest or lien on a mobile home by real property foreclosure
where the owner of a mobile home has an ownership interest in the real property.
Ownership interest is generally defined as having title to the property or
being a lessee of a ground lease of twenty years or more. Effective July
14, 2003.
- Public Act 45 of 2003: Amends the Income Tax
Act to define “flow-through
entity”, “member” of a flow-through entity and “nonresident
member” of a flow-through entity. Effective October 1, 2003.
- Public Act 46 of 2003: Requires all business entities
authorized to transact business in the state submitting a certificate of
dissolution or requesting a certificate of withdrawal, to request a certificate
from the Michigan Treasury Department stating that taxes are not due. Effective
October 1, 2003.
- Public Act 52 of 2003: Expands the definition
of “business
income” under
Section 4 of the Income Tax Act of 1967. Effective July 14, 2003
- Public Act 53 of 2003: Amends the Administrative Procedures
Act to require the Office of Regulatory Reform to publish the Michigan Administrative
Code, the annual supplement to the Michigan Administrative Code, and the
Michigan Register, in Electronic Format. Effective July 14, 2003.
- Public Act 81 of 2003: Amends Section 1101 of the Michigan Limited
Liability Act to reflect changes pertaining to filing fees. Effective July 23,
2003.
- Public Act 106 of 2003: Amends the Michigan
Business Corporation Act to reflect changes pertaining to filing fees.
Effective July 24, 2003.
- Public Act 107 of 2003: Amends the Michigan
Nonprofit Corporation Act to reflect changes pertaining to filing fees.
Effective July 24, 2003.
- Public Act 131 of 2003: Revises the reference
in the Tax Tribunal Act from “homestead exemption” to “principal
residence exemption”.
Effective January 1, 2004. See also Public Act 140 of 2003 which revises
the General Property Tax Act to replace the term “homestead” with
the term “principal residence.” Various other statutes have been/may
be amended to revise the definition of “homestead exemption” to “principal
residence exemption.” Effective January 1, 2004.
- Public Act 150 of 2003: Effective August 8, 2003,
this Act contains revisions to the filing fees under the Uniform Securities
Act.
- Public Act 174 of 2003: Amends the Michigan
Employment Security Act to allow the payment of additional temporary
extended unemployment compensation based upon the State’s average
rate of total unemployment. Effective August 14, 2003.
- Public Act 181 of 2003: Amends Section 791
of the Michigan Business Corporation Act to expressly state that formation
of a group does not constitute a control share acquisition of shares
of an issuing public corporation held by members of the group. Also adds
Section 798a which states that shares without voting rights because of
the formation of a group shall have the same voting rights as were accorded
the shares before formation of the group. Effective October 7, 2003.
- Public Act 215 of 2003: Repeals Public Act
285 of 1925 and creates the “Credit
Union Act” to provide for the regulation of credit unions. Effective
June 1, 2004
- Public Acts 216-218 of 2003: Amends various
laws to replace references to Public Act 285 of 1925 with references
to the Credit Union Act. The bills also refer to a "domestic credit union" rather
than a "credit
union" or "state-charter credit union," and updates references
to the Banking Code and the Savings and Loan Act. PA 216 amends the Michigan
Consumer Protection Act; PA 217 amends the Michigan Penal Code; PA 218
amends Public Act 43 of 1973, which permits associations, institutions
and credit unions to process or handle food stamps. Effective December
2, 2003.
- Public Act 220 of 2003: Amends Public Act 322 of 1978,
which authorizes financial institutions to make electronic funds transfer
terminals available to consumers. Effective December 2, 2003.
- Public Act 239 of 2003: Amends the Michigan Income
Tax Act to delay the scheduled income tax rate reduction from January 1,
2004 to July 1, 2004. Under the Act, the rate in 2003 was 4% and was to be
3.9% on January 1, 2004 and thereafter. Effective December 29, 2003.
- Public Act 265 of 2003: Amends the Michigan
Broadband Development Authority Act to require that priority be given
to the application of any broadband developer who applied to develop
broadband capability within a “recovery
zone” designated in the Michigan Renaissance Zone Act. Effective
January 5, 2004.
- Public Acts 266 and 273 of 2003: Amends various
statutes to permit the designation of up to 20 tool and die renaissance
recovery zones, allows certain tool and die, machine tool and molding
companies to claim a single business tax credit of up to $4,000 for the
costs of training an apprentice, allows a taxpayer who purchased personal
property from a qualified tool and die business to claim an SBT credit
equal to the amount paid for the property, provides grants for broadband
infrastructure, expands personal property tax exemption for special tools,
provides that the depreciation of personal property used to develop tool
and die products could not be less than allowed under the Internal Revenue
Code, exempts from the use tax a construction contractor’s
labor cost to manufacture, fabricate, or assemble personal property before
affixing it to real property, and gives skilled trade associations access
to school facilities to provide information about apprenticeship programs.
Effective January 5, 2004 and January 8, 2004, respectively.
- Public Act 277 of 2003: Amends the Brownfield
Redevelopment Financing Act to revise the Act’s definition of “initial taxable value”.
The bill would refer to the taxable value of eligible property identified
in a brownfield plan as shown either by the most recent assessment
roll (as currently provided) or, if provided by the brownfield plan, by the
next assessment roll for which equalization would be completed following
the date the resolution adding the property in the plan was adopted. Effective
January 8, 2003.
- Public Act 295 of 2003: Amends the Income
Tax Act to allow an income tax credit, for tax years beginning after
2009 and before 2020, for a “claimant” or
for a taxpayer to whom a certificate and remaining single business tax
(SBT) credit amount had been transferred under the SBT Act. Effective January
8, 2004.
- Public Act 296 of 2003: Creates the “Michigan
Early Stage Venture Capital Investment Act” to require that, within
one year after the bill’s effective date, the “Michigan Early
Stage Venture Capital Investment Corporation” be established, a fund
manager be hired, an investment plan be established, and funds be solicited
and available for investment consistent with that plan. The Corporation would
have to create the “Michigan Early Stage Venture Capital Investment
Fund”. Money
in the Fund could be invested in venture capital companies to promote
investment in qualified businesses. Also amends the Single Business Tax
Act to specify that, for tax years beginning after 2008 and before 2020,
a taxpayer that was an investor could claim an SBT credit equal to the
amount determined and certified under Senate Bill 834. For tax years
beginning after 2009, if a credit against the SBT or a successor tax
were not allowed, the taxpayer could transfer the credit to a person
who could claim an income tax credit. The total amount of all certified
SBT credits for all taxpayers for all years could not exceed $150 million.
The total amount of all credits authorized for any one year could not
exceed $30 million. In addition, the Income Tax Act is amended to provide
that, for tax years beginning after 2009 and before 2020, a taxpayer
to whom a certificate and remaining SBT credit amount had been transferred
could claim that credit against the income tax. Effective January 8,
2004.
- Public Act 126 of 2004: Adds section 31a to the Single
Business Tax Act, and states that a taxpayer that is a qualified start-up
business that does not have a profit under a tax year may claim a credit
against the tax imposed under the Act for that tax year and any of the four
immediately following tax years. Effective May 28, 2004.
- Public Act 212 of 2004: Amends Section 9-501
of the Uniform Commercial Code (MCL 440.9501), requiring that the Secretary
of State provide written notice of the filing of financing statements.
Allows debtors named in fraudulent financing statements to bring actions
against those filing such statements. It also makes the filing of fraudulent
financing statements a misdemeanor punishable by imprisonment, fines,
or both. Effective July 14, 2004.
- Public Act 251 of 2004: Amends the Obsolete Property
Rehabilitation Act to provide that, upon application for an exemption from
the obsolete properties tax by a qualified start-up business, the governing
body of a local tax collecting unit could adopt a resolution to exempt a
rehabilitated facility of the business from the collection of the tax in
the same manner and under the same terms and conditions as provided for the
exemption in PA 252 of 2004. Effective July 23, 2004.
- Public Act 252 of 2004: Amends the General Property
Tax Act to exempt the real and personal property of a qualified start-up
business from taxes levied under the Act after December 31, 2004, for up
to five years, if the business applied for the exemption and the governing
body of the local tax collection unit or, for taxes levied by the county,
the County Board of Commissioners, adopted a resolution approving the exemption.
Effective July 23, 2004.
- Public Acts 302 and 301 of 2004: Allows a taxpayer
to claim a credit against its SBT Tax in an amount equal to 50% of the fair
market value of an automobile donated by the taxpayer to a qualified organization
that intends to provide the automobile to a qualified recipient. Effective
July 23, 2004.
- Public Acts 312 and 313 of 2004: Allows a taxpayer
to claim a credit against income tax in an amount equal to 50% of the fair
market value of an automobile donated to a qualified organization that intends
to provide the automobile to a qualified recipient. Effective August 27,
2004.
- Public Acts 321-324 of 2004: The Acts were part of
a package of bills exempting qualified start-up businesses from certain taxes,
with local approval. PA 321 amends the Technology Park Development Act to
provide for an exemption from the technology park facilities tax, which is
levied upon every owner and every user or occupant, if known, of a facility
to which a certificate is issued under the Act. PA 322 amends the City Utility
Users Tax Act to exempt a qualified start-up business from the tax imposed
by the City of Detroit on intrastate telephone communications services, electrical
energy, steam and natural and artificial gas provided by a public utility
or a resale customer. PA 323 amends the Plant Rehabilitation and Industrial
Development Act to create an exemption from the industrial facilities tax
for a speculative building, new facility or replacement facility owned or
operated by a qualified start-up business. PA 324 amends PA 189 of 1983 to
allow an exemption, for taxes levied after December 31, 2004, for real and
personal property of a qualified start-up business from the lessee-user tax
if the business applies for an exemption and the governing body of the local
tax collecting unit adopts a resolution approving the exemption. Effective
August 27, 2004.
II. NEW BILLS AND STATUS OF PENDING BILLS
- Senate Bill 21 of 2003 - Would create a new
Act for the regulation of deferred deposit loan transactions. Referred
to the Committee on Banking and Financial Institutions on January 21,
2003.
- Senate Bill 61 of 2003 - Would create the Check Cashing
Licensing Act, which requires check-cashing businesses to first obtain a
license. Referred to Committee on Banking and Financial Institutions on January
23, 2003.
- Senate Bill 113-114 of 2003 - This Bill
proposes certain amendments to the Non-Profit Corporation Act and the
Limited Liability Company Act, respectively, to eliminate the annual
fee if the non-profit corporation or limited liability company is recording
no changes in officers and directors and is not changing its resident
agent or registered office address. Referred to the Committee on Economic
Development, Small Business and Reg. Reform on January 29,
2003.
- Senate Bill 167 of 2003 - Similar
to Senate Bills 113 and 114 of 2003, except applies to profit corporations
under the MBCA. Referred to the Committee on Economic Development, Small
Business and Reg. Reform on February 11, 2003.
- Senate Bill 172 of 2003 - Would create a new
Act to require the seller of real property to make disclosures regarding
toxic mold. The Bill was referred to the Committee on Economic Development,
Small Business and Reg. Reform on February 11, 2003.
- Senate Bill 208 of 2003 - For tax years beginning
after December 31,
2002, would allow a deduction for the cost of the purchase of a hybrid fuel
vehicle for income tax purposes. This Bill was referred to the Committee on
Finance on February 25, 2003.
- Senate Bill 220 of 2003 - Would amend the Michigan
Consumer Protection Act to prohibit issuing or delivering to a consumer
a receipt that displayed any part of a credit or debit card’s expiration
date or more than the last four digits of the consumer’s account
number, if a credit card or debit card were used for payment in a consumer
transaction. This bill has passed the Senate and the House. It was laid
over one day under the rules on November 10, 2004.
- Senate Bill 415 of 2003 - Would require out-of-state
affiliates to be subject to taxation. The Bill was referred to the Committee
on Finance on April 29,
2003. See also House Bill 4571 of 2003.
- Senate Bill 474 of 2003 - Would create the Deferred
Presentment Services Act, which would preclude conducting such a business
without first obtaining a license from the Commissioner of the Office of
Financial and Insurance Services (OFIS). Vetoed by the governor on January
9, 2004.
- Senate Bill 490 – 495 of 2003 – Would amend
various laws to replace references to Public Act 285 of 1925 with references
to the “Credit
Union Act”. The bills also would refer to a “domestic credit union” rather
than a “credit union” or “state-chartered credit union,” and
would update references to the Banking Code and the Savings and Loan Act. SB
490 would amend PA 156 of 1851, which defines the powers and duties of county
boards of commissioners; SB 491 would amend PA 322 of 1978, which authorizes
financial institutions to make electronic funds transfer terminals available
to consumers; SB 492 would amend the Motor Vehicle Safety Act. SB 490-492 passed
Senate; referred to Committee on Commerce on October 16, 2003. SB
493-495 was passed into law, see PA 216-218 of 2003.
- Senate Bill 657 of 2003 - Would amend the Michigan
Consumer Protection Act, making it unlawful to require a consumer to disclose
his or her Social Security number as a condition of sale, unless the transaction
involved an extension of credit or disclosure was required or authorized
by law. The bill would take effect on March 31, 2004. This bill has passed
the Senate and the House. It was laid over one day under the rules on November
10, 2004.
- Senate Bill 675 of 2003 - Called the Employee Communications
Monitoring Act, this bill would prohibit certain employers from monitoring
employee communications unless a monitoring policy is established and disclosed
to the employees. Referred to Committee on Commerce and Labor on September
16, 2003.
- Senate Bill 745 – 746 of 2003 - Would amend the
Michigan Limited Liability Act and Business Corporation Act to permit converting
entities to transfer certificates of assumed names. The Bill would also specify
the requirements for a plan of conversion for converting entities. Referred
to Committee on Commerce and Labor on September 30, 2003.
- Senate Bill 747 of 2003 - Would amend the Professional
Service Corporation Act to expressly require that limited liability companies
converting to a corporation may not convert into a professional corporation
unless members who will become shareholders are licensed persons who may
be shareholders under the Act. Referred to Committee on Commerce and Labor
on September 30, 2003.
- Senate Bill 775 - 776 of 2003 - Would amend the Single
Business Tax Act and Income Tax Act to permit taxpayers to claim a $1,000
credit for each alternative energy vehicle purchased or leased as a fleet
car. Referred to Committee on Finance on October 14, 2003.
- Senate Bill 862 of 2003 - Would amend the Single Business
Tax Act to create a single business tax (SBT) credit for a taxpayer that
was a qualified start-up business that did not have net income for two consecutive
tax years, for tax years beginning after December 31, 2003.Reassigned to
the Committee on Tax Policy on February 12, 2004.
- Senate Bill 863 through 873 and 875 of 2003 - Would
amend various statutes to provide qualified start-up businesses with specific
tax and development advantages.SB 863, 865, 867, 869, 872, 875 vetoed by
Governor on May 28, 2004; SB 864, 866 (see below), 868, 870, 871 reassigned
to the Committee on Tax Policy on February 12, 2004; SB 873 referred to Committee
on Economic Development, Small Business and Regulatory Reform on December
2, 2003.
- Senate Bill 866 of 2003 - Would amend the City
Income Tax Act to allow a qualified start-up business to claim a credit
against the city income tax. If the city income tax credit and any unused
carryforward exceeded the taxpayer’s
tax liability for the tax year, the excess could not be refunded but could
be carried forward as an offset to the tax liability in subsequent tax
years, for 10 tax years or until the excess credit was used up, whichever
occurred first. Reassigned to Committee on Tax Policy on February 12,
2004.
- Senate Bill 1012 of 2004 – Would amend section
39e of 1975 PA 228 (MCL 208.39e) so that, for tax years beginning after December
31, 2004, a person engaged in the person’s first or second year of
business and the person’s
allocated gross receipts are less than $500,000 for the tax year, the person
need not file a return to pay the tax provided under the Act. Referred
to the Committee on Finance on February 25, 2004.
- Senate Bill 1115 of 2004: Would amend the Charitable
Organization and Solicitations Act, requiring charitable organizations and
professional-fund raisers to register with the attorney general, and provide
for the registration of vendors. Would require registration fees and late fees,
and would require charitable organizations and professional fund-raisers to
include financial information and information about directors, officers, and
employees. Passed by the Senate and referred to the Committee on Commerce on
July 7, 2004.
- Senate Bill 1117 of 2004: Would amend 1855
PA 105, by adding Section 2g (MCL 21.141 to 21.147) so that the State
Treasurer would be able to invest surplus funds under the State Treasurer’s
control in certificates of deposit or other instruments of a financial
institution qualified under the Act to receive deposits or investments
of surplus funds for the purpose of facilitating qualified business loans.
The State Treasurer would make all such qualified business loans available
in all geographic regions of the state. The State Treasurer, in consultation
with the Michigan Economic Development Corporation, would enter into investment
agreements with financial institutions to provide for the investment under
this subsection. Referred to Committee on Economic Development, Small Business
and Regulatory Reform on March 18, 2004.
- Senate Bill 1118 of 2004: Would amend the General Property
Tax Act, 1893 PA 206, by adding Section 9j, which would exempt $10,000 of the
aggregate taxable value of the personal property of a qualified small business
from collection of taxes under the Act as provided in this subsection, for
taxes levied after December 31, 2004. Referred to Committee on Finance on March
18, 2004.
- Senate Bill 1366 of 2004 – Would amend
PA 236 of 1961 ((MCL 600.934), to permit non-residents of the United
States to become members of the Michigan State Bar. Referred to Committee
on Judiciary on September 8, 2004. Passed the Senate. Referred to House
Committee on Judiciary on November 4, 2004.
- Senate Bill 1393 -1395 – Would create the "Money
Transmission Services Act" to do all of the following: prohibit a person
from providing "money
transmission services" without a license issued under the proposed Act,
except as otherwise provided; specify requirements for applying for a money
transmission services license; require the Commissioner of the Office of Financial
and Insurance Services (OFIS) to establish a fee schedule for applicants and
licensees; authorize the Commissioner to examine and investigate a licensee
or any of its "authorized delegates"; specify various filing,
notice, reporting, and record-keeping requirements of a licensee; require
a licensee to maintain a certain amount of permissible investments; regulate
a licensee's authorized delegates; provide for various criminal, civil,
and administrative sanctions against a licensee; provide for the confidentiality
of information obtained by OFIS and its employees; authorize the Commissioner
to promulgate rules to implement and enforce the proposed Act; repeal the
Sale of Checks Act (MCL 487.901-487.916). Referred to Committee on Banking
and Financial Institutions on September 15, 2004.
- Senate Bill 1394 - Would amend the Code of Criminal
Procedure to include in the sentencing guidelines felony offenses proposed
by Senate Bill 1393. Intentionally making a false statement, misrepresentation,
or certification in a record or document, and criminal fraud in the conduct
of a money transmission services business each would be a Class E felony
against the public trust, with a statutory maximum sentence of five years'
imprisonment. Referred to Committee on Banking and Financial Institutions
on September 15, 2004.
- Senate Bill 1395 - Would amend the Consumer
Financial Services Act to include the Money Transmission Services Act
in the definition of "financial licensing
acts". Referred to Committee on Banking and Financial Institutions
on September 15, 2004.
- House Bill 4220 of 2003 - Would exempt non-profit
charitable institutions from special assessments, revising MCLA 211.7(o). Referred
to the Committee on Tax Policy on February 13, 2003.
- House Bill 4346 of 2003 - Would amend the Michigan
Liquor Control Code of 1998 to allow for the importation of alcoholic
liquor containing less than 21% alcohol by volume, for personal use and
only up to 24 bottles per month, from a state determined to allow reciprocal
sales. Allows reciprocal shipping for wine producers. This Bill was referred
to the Committee on Regulatory Reform on March 13, 2003. See also
Heald v. Engler (Electronic citation: 2003 FED App. 0308P 6 th CIR August
28, 2003).
- House Bill 4571 of 2003 - Would require out-of-state
affiliates to be subject to taxation. The Bill was referred to the Committee
on Tax Policy on April 10,
2003. See also Senate Bill 415 of 2003.
- House Bill 4863 of 2003 - Would amend the
General Sales Tax Act so that a nonprofit organization with aggregate retail
sales in a calendar year of less than $5,000 is not required to charge sales
tax when making sales for fundraising purposes. The bill would
increase the threshold to $75,000. Referred to second reading on December
16, 2003.
- House Bill 4882 of 2003 - Would eliminate the
Use Tax on manufactured home sales, except for new manufactured homes
purchased out of state and brought into the state for initial use. On
June 24, 2003,
the Bill was referred to the Committee on Commerce. It was reported with
recommendation for referral to the Committee on Local Government and Urban
Policy on September 30,
2003. Reported with recommendation with substitute H-2, referred to second
reading, and laid over one day under the rules on May 20, 2004.
- House Bill 5010 of 2003 - Would provide for
revisions to the General Property Tax Act, including providing for a
one time summer property tax collection. Referred to the Committee on
Tax Policy on August 13,
2003.
- House Bill 5075 of 2003 - Would amend Section 4110
of the Uniform Commercial Code (MCL 440.4110) so that an agreement for electronic
presentment shall provide a procedure that prohibits presentment by transmission
of an image of an item or presentment notice if the drawer of the item requests
that electronic presentment not be used for the drawer’s items
and requires written notice to each drawer of his or her right to make
that request. Referred to Committee on Commerce on September 25, 2003.
- House Bill 5249 of 2003 - Would amend the Single Business
Tax Act (MCL 208.37e) to permit a taxpayer purchasing tangible personal property
from a qualified tool and die business to claim a credit against the SBT
equal to the amount actually paid for tangible personal property. The bill
applies to tax years beginning January 1, 2004. Referred to Committee on
Commerce on November 4, 2003.
- House Bill 5295 of 2003: Called the Public Auction
Licensing Act, this bill would bar the sale at public auction within the
state without first obtaining a license under the Act. Referred to Committee
on Regulatory Reform on November 13, 2003.
- House Bill 5296 of 2003: Called the Liquidation
Sale Licensing Act, this bill would bar the sale or advertisement of
sale as an insurance, bankruptcy, mortgage, insolvency, assignee’s, executor’s,
administrator’s,
receiver’s, trustee’s, removal, or going out of business sale,
or a sale of damaged goods, without first obtaining a license. Referred
to Committee on Regulatory Reform on November 13, 2003.
- House Bill 5323 of 2003 – Would amend
section 36 of the Single Business Tax Act to preclude professional employer
organizations that are not captive providers from claiming the credit
allowed under the section. Referred to Committee on Tax Policy on December
2, 2003. Reported with recommendation with substitute H-2, referred to
second reading, and laid over one day under the rules on May 5, 2004.
- House Bill 5330 of 2003 – Would amend
section 12 of the Technology Park Development Act to provide that a facility
owned or operated by a qualified start-up business is exempt from the technology
park facilities tax levied under the Act. Referred to Committee on Tax
Policy on December 2, 2003.
- House Bill 5335 of 2003 – Would amend
section 9 of the Neighborhood Enterprise Zone Act to state that a new
or rehabilitated facility owned or operated by a qualified start-up business
is exempt from neighborhood enterprise zone tax. Vetoed on May 28, 2004.
- House Bill 5341 of 2003 – Would add section
7gg to the General Property Tax Act which exempts real and personal property
of qualified start-up business from tax for a period of five years. Vetoed
on May 28, 2004.
- House Bill 5342 of 2003 – Would amend
section 21c of the Enterprise Zone Act to exempt facilities owned or
operated by qualified start-up businesses for a period of five years.
Vetoed on May 28, 2004.
- House Bill 5343 of 2003 – Would amend
section 10 of the Obsolete Property Rehabilitation Act so that rehabilitated
facilities owned or operated by qualified start-up businesses are exempt
from the obsolete properties tax levied by the Act. Vetoed on May 28, 2004.
- House Bill 5345 of 2003 – Would add section 635a
to the City Income Tax Act which states that a qualified start-up business
may claim a credit against the tax imposed by the Act each tax year equal
to the taxpayer’s
tax liability for the tax year for five consecutive tax years. Vetoed on
May 28, 2004.
- House Bill 5346 of 2003 – Would add section 51f
to the Income Tax Act of 1967 so that qualified start-up businesses may claim
a credit against the tax imposed by the Act equal to the taxpayer’s
liability for five consecutive tax years. Referred to Committee on Tax
Policy on December 3, 2003.
- House Bill 5348 of 2003 – Would amend
section 11 of 1974 PA 198 to state that a speculative building, new facility,
or replacement facility owned or operated by a qualified start-up business
is exempt from the industrial facility tax levied under the Act for five
consecutive years. Referred to the Committee on Tax Policy on December
3, 2003.
- House Bill 5350 of 2003 – Would amend
the City Utility Users Act to provide that qualified start-up businesses
are exempt from tax for the five consecutive tax years. Referred to the
Committee on Tax Policy on December 4, 2003.
- House Bill 5599 of 2004 – Would amend
1978 PA 390 to permit employers to pay employees using direct deposit
or electronic transfer. Referred to Committee on Employment Relations,
Training and Safety on February 26, 2004. Substituted H-3 adopted and
amended on September 29, 2004.
- House Bills 5746-5756 of 2004 - Would create the new
Uniform Securities Act. It would repeal the existing Uniform Securities Act,
Public Act 265 of 1964. The new act would take effect 180 days after enactment.
The House Bills would each amend a separate act to update references to make
them apply to the new Uniform Securities Act. Reported with recommendation
with substituted H-3, referred to second reading, and laid over for one day
under the rules on November 10, 2004.
- House Bill 5819 of 2004 - Would provide for the State
Treasurer to create a fund for the purposes of establishing and administering
a program for awarding grants to attract, retain, and expand businesses.
Referred to Committee on April 22, 2004.
- House Bill 5831 of 2004 - Would amend the General Usury
Act, to specify that the parties to a loan, land contract, or other extension
of credit could agree in writing to a late payment charge, a prepayment fee
or increased interest on unpaid principal balance after the maturity date,
and for the purposes of these provisions such charges would not constitute
a penalty. The bill further provides for adding accrued interest to the unpaid
principal balance, which such amount will accrue interest when the obligor
fails to pay interest on time. Referred to Committee on Commerce on April
29, 2004.
- House Bill 5833 of 2004 - Would amend the Common Trust
Fund Act, PA 174 of 1941 (MCL 555.101 et. al.), to allow financial institutions
to establish and invest in collective investment funds. Unless otherwise
specified, the provisions of the Act would apply to both common trust funds
and collective investment funds. Referred to the Committee on Commerce on
April 29, 2004. Reported with recommendation with substitute H-1, Referred
to second reading and laid over one day under the rules on May 4, 2004.
- House Bill 6153 of 2004 - Would provide a tax credit against
income tax for the purchase during the tax year of a new, alternative energy
vehicle for personal use and not for resale. Referred to Committee on tax
policy on September 9, 2004.
- House Bill 6175 of 2004 - Would amend the Michigan Consumer
Protection Act, PA 331 of 1976 (MCL 445.903), to expand the definition of
deceptive and unfair trade practices. Passed the House. Referred to Senate
Committee on Judiciary on September 30, 2004.
Respectfully submitted,
Eric I. Lark
Kerr, Russell and Weber, PLC
September 23, 2004
May 22, 2004
I. Introduction
A. Coverage Period
The following summary is intended to highlight significant legislation in the
business context taking place in 2003 session through April 25, 2004.
B. How To Stay Current
The State Bar of Michigan publishes its "E-Journal",
which is a helpful way to stay apprised of new and pending legislation. Subscription
to the "E-Journal" is
available at the State Bar of Michigan's website located
at www.michbar.org.
Similarly, the Institute of Continuing Legal Education (ICLE) publishes its
weekly News Alert. Information about ICLE's News Alert is available at ICLE's
website at www.icle.org.
II. New Laws
A. The New Michigan Notary Public Act
The new Michigan Notary Public Act (Public Act 238 of 2003) took effect on
April 1, 2004.
After approving an application, the Secretary of State must mail to the applicant
a certificate of appointment as a notary public. Each certificate identifies
the person as a notary public of the State and specifies the term of his
or her commission. Under the former law, the commission was received at the
county clerk's office.
A notary public can reside in, move to, and perform notarial acts anywhere in
the State from the date of appointment until the notary's birthday that occurs
between six and seven years after the date of appointment, unless it is canceled,
suspended, or revoked by the Secretary or by law. (Formerly, a notary's appointment
remained in effect until the notary's birthday that occurs between four and
five years after the date of the appointment.)
The Act prohibits the Secretary from appointing as a notary a person who was
serving a term of imprisonment in a State correctional facility or jail in
Michigan or another state, or in a Federal correctional facility. Under the
new law, background checks are allowed.
The Secretary must automatically cancel the commission of any person who made,
drew, uttered, or delivered any check, draft, or order for the payment of
a service charge under the bill that was not honored by the bank, financial
institution, or other depository expected to pay the check, draft, or order
for payment upon its first presentation.
The amendments require the Secretary, monthly, to notify a county clerk's office
of notary appointments.
Reappointment/Corrected Appointment
The Secretary will not automatically reappoint a notary, but a person who desires
another appointment can apply to the Secretary for an original appointment
as a notary. The person cannot apply more than 60 days before his or her
current notary public commission expires. Also, a notary public must apply
for a corrected commission if there is a change in the person's name or address,
or if there was an error in the notary's personal information.
If a notary public's certificate of appointment becomes lost, mutilated, or illegible,
the notary public must apply promptly to the Secretary for the issuance of
a duplicate certificate. The application must be accompanied by a $10 fee.
One dollar of each fee will be deposited into the Notary Education and Training
Fund.
Surety Bond/Oath/Fee
Within 90 days before applying for a notary public appointment, a person must
file a proper surety bond with the county clerk of the county where he or
she lives or expects to live, and take the prescribed oath. The bond must
be in the sum of $10,000, and issued by a surety licensed to do business
in the State. The county clerk may not accept the personal assets of an applicant
as security for a surety bond. The bond must be conditioned upon indemnifying
or reimbursing a person, financial agency, or governmental agency for monetary
loss caused through the official misconduct of the notary public in the performance
of a notarial act. The surety must be required to indemnify or reimburse
only after a court has entered against the notary a judgment based on official
misconduct. The aggregate liability of the may not exceed the sum of the
bond. The surety on the bond could cancel it 60 days after notifying the
notary, the Secretary, and the county clerk of the cancellation. The surety
would not be liable for a breach of a condition occurring after the effective
date of the cancellation.
Each person who files an oath and bond with a county clerk must pay a $10 filing
fee to the clerk. Upon receiving the fee, the clerk must give a bond and
oath certificate of filing to the person. A charter county with a population
over 2 million can by ordinance charge a fee for the county clerk's services
different that the $10 fee. Two dollars of each fee collected by a county
clerk must be deposited into the Notary Education and Training Fund on a
schedule determined by the Secretary.
Funds
The amendments create the Notary Education and Training Fund in the State Treasury,
and requires that money from certain fees be deposited in the Fund. (As noted
above, this would include $1 of the $10 application fee, $2 of the $10 oath
and bond filing fee, and $1 of the $10 fee for a duplicate certificate of
appointment.) The State Treasurer can receive money or other assets from
any source for deposit into the Fund, and must direct the investment of the
Fund and credit to it interest and earnings from Fund investments. Up to
$85,000 can remain in the Fund at the close of each fiscal year and not lapse
to the General Fund. Any amount in excess of $85,000 will lapse to the General
Fund.
The Secretary must spend money from the Fund in the form of grants, upon appropriation,
for the purposes of providing education and training programs for county
clerks and their staffs, including notary responsibilities, election worker
training, and election processes. The Secretary must consult with the president
of the Michigan Association of County Clerks, or his or her designee, when
approving grant applications.
The Secretary annually must file a report regarding the balance of the Fund at
the time of the report and a detailed account of the expenditures in the
preceding fiscal year. This report must be sent to the Speaker of the House
of Representatives, the Majority Leader of the Senate, and the Minority Leaders
of the House and Senate.
The bill also creates the Notary Fees Fund in the State Treasury. Except for
money deposited in the Notary Education and Training Fund from the application
fee and the fee for a duplicate certificate of appointment, an application
fee, duplicate certificate of appointment fee, certification service charge,
copying service charge, reimbursement costs, or administrative fine collected
under the bill by the Secretary, must be deposited by the State Treasurer
in the Notary Fees Fund. Money in this Fund must be appropriated to defray
the costs incurred by the Secretary in administering the proposed Act. Any
money remaining at the end of the fiscal year, in excess of $85,000, lapses
to the General Fund.
Notarial Acts
The fee charged by a notary for performing a notarial act may not be more than
$10 for any individual transaction or notarial act. (Under the former law,
for notarizing an acknowledgment or jurat a notary could not charge more
than $2. A notary also is entitled to various fees, which do not exceed 50
cents, for copying and serving.) The bill requires a notary either to display
a sign conspicuously or expressly to advise a person concerning the fee amount
to be charged for a notarial act before the notary performs the act. Before
the notary travels in order to perform a notarial act, he or she and the
client can agree concerning a separate travel fee to be charged by the notary.
A county clerk can collect a service charge fee of $10 for certifying a notarial
act of a notary.
A notary can refuse to perform a notarial act.
Prohibited Acts
A notary who is not a licensed attorney and who advertised
notarial services in a language other than English would have to include
in the document, advertisement, stationery, letterhead, business card, or
other comparable written material, prominently displayed in the same language,
the fees for notarial acts and the statement: "I am not an attorney and have
no authority to give advice on immigration or other legal matters." A notary
cannot use the term "notario publico" or
any equivalent non-English term in any business card, advertisement, notice,
or sign.
A notary cannot perform a notarial act for a spouse, domestic partner, descendant,
or sibling including an in-law, step, or half-relative.
Records/Misconduct/Investigations
For any official misconduct of a notary, the notary and
the sureties on the notary's surety bond will be liable in a civil action
for the damages sustained by the persons injured. ("Official misconduct" means
the exercise of power or the performance of a duty that was unauthorized,
unlawful, abusive, negligent, reckless, or injurious; and/or the charging
of a fee that exceeds the maximum amount authorized by law.) Under the new
law, an employer of a notary also is liable if the notary were acting within
the actual or apparent scope of his or her employment, and the employer knew
of and consented to or permitted the official misconduct. A notary and the
notary's sureties are not liable for the truth, form, or correctness of the
contents of a record upon which the notary performed a notarial act.
Repealed
The new Act repeals the following:
- Chapter 14 of the Revised Statutes of 1846, which provides
for the appointment and regulation of notaries public.
- Public Act 18 of 1903, which requires notaries to affix to each instrument
signed notarially their commissioned name, the county of authorization, and
the date of expiration of their commission.
- Public Act 18 of 1909, which places certain restrictions on notaries who are
stockholders, directors, officers, or employees of banks or other corporations.
- Section 2564 of the Revised Judicature Act, which allows notaries to charge
certain fees for various services.
- Executive Reorganization Order No. 1980-2, which transferred to the Department
of State all powers, duties, and functions of the Governor with respect to
notaries.
B. Unpaid Taxes of Dissolving Businesses
Public Act No. 23 of 2003 took effect June 24, 2003. This Act states that if
a person liable for a tax administered under the Act sells out his or her
business, or its stock of goods, or quits the business, the person must make
a final return within 15 days after the date of selling or quitting the business.
The purchaser or succeeding purchasers, if any, who purchase an ongoing or
closed business or its stock of goods, must escrow sufficient money to cover
the amount of taxes, interest, and penalties as may be due and unpaid until
the former owner produces a receipt from the state treasurer or the state
treasurer's designated representative showing that the taxes due are paid,
or a certificate stating that taxes are not due. Upon the owner's written
waiver of confidentiality, the Department of Treasury may release, to a purchaser,
a business's known tax liability for the purposes of establishing an escrow
account for the payment of taxes. If the purchaser or succeeding purchasers
of a business or its stock of goods fail to comply with the escrow requirements
of this subsection, the purchaser is personally liable for the payment of
the taxes, interest, and penalties accrued and unpaid by the business of
the former owner. The purchaser's or succeeding purchaser's personal liability
is limited to the fair market value of the business less the amount of any
proceeds that are applied to balances due on secured interests that are superior
to the lien provided for in Section 29(1).
Furthermore, a deficiency, interest, or penalty may not be assessed after the
expiration of 4 years after the date set for the filing of the required return
or after the date the return was filed, whichever is later. The taxpayer
may not claim a refund of any amount paid to the Department after the expiration
of 4 years after the date set for the filing of the original return. A person
who has failed to file a return is liable for all taxes due for the entire
period for which the person would be subject to the taxes. If a person subject
to tax fraudulently conceals any liability for the tax or a part of the tax,
or fails to notify the Department of any alteration in or modification of
federal tax liability, the Department, within 2 years after discovery of
the fraud or the failure to notify, must assess the tax with penalties and
interest as provided by the Act, computed from the date on which the tax
liability originally accrued. The tax, penalties, and interest are due and
payable after notice and hearing as provided by the Act.
The statute of limitations is suspended for the following:
- The period pending a final determination of tax, including audit, conference,
hearing and litigation of liability for federal income or a tax administered
by the Department and for 1 year after that period.
- The period for which the taxpayer and the state treasurer have consented to
in writing that the period be extended.
The running of the statute of limitations is suspended only as to those items
that were the subject of the audit, conference, hearing, or litigation for
federal income tax or a tax administered by the Department.
The Act also states that if a corporation, limited liability company, limited
liability partnership, partnership, or limited partnership liable for taxes
administered under the Act fails for any reason to file the required returns
or to pay the tax due, any of its officers, members, managers, or partners
who the Department determines, based on either an audit or an investigation,
have control or supervision of, or responsibility for, making the returns
or payments is personally liable for the failure. The signature of any corporate
officers, members, managers, or partners on returns or negotiable instruments
submitted in payment of taxes is prima facie evidence of their responsibility
for making the returns and payments. The dissolution of a corporation, limited
liability company, limited liability partnership, partnership, or limited
partnership does not discharge an officer's, member's, manager's, or partner's
liability for a prior failure of the corporation, limited liability company,
limited liability partnership, partnership, or limited partnership to make
a return or remit the tax due. The sum due for a liability may be assessed
and collected under the related sections of the Act.
C. Amendments to the Use Tax Act
Effective June 24, 2003, Public Act 24 of 2003 amended the Use Tax Act to provide
that every person storing, using, or consuming tangible personal property
or services, the storage, use, or consumption of which is subject to the
tax imposed by the Act when the tax was not paid to a seller, and every seller
collecting the tax from the purchaser, unless otherwise prescribed by the
Department under the provisions of Subsection (2), (3), or (4) of the Act,
on or before the fifteenth day of each calendar month must file with the
revenue division of the Department of treasury a return for the preceding
calendar month, in a form prescribed by the Department, showing the price
of each purchase of tangible personal property or services during the preceding
month, and other information the Department considers necessary for the proper
administration of the Act. At the same time, each person must pay to the
revenue division of the Department of treasury the amount of tax imposed
by the Act with respect to the purchases covered by the return. A return
must be signed by the person liable for the tax or his or her duly authorized
agent. If the return is prepared by a person other than the taxpayer, the
return must also be signed by that person and show his or her address.
Before January 1, 1999, each seller that had a total tax liability after subtracting
the tax payments made to the Secretary of State under the Act or the Sales
Tax Act, 1933 PA 167, MCL 205.51 to 205.78, or after subtracting the tax
credits available under Section 6a of the General Sales Tax Act, 1933 PA
167, MCL 205.56a, in the immediately preceding calendar year of $720,000
or more on or before the eighteenth of each month must remit to the Department,
by an electronic funds transfer method approved by the Commissioner of Revenue,
an amount equal to 95% of the taxpayer's liability under the Act for the
same month in the immediately preceding calendar year, or 95% of the actual
liability for the current month being reported, plus a reconciliation payment
equal to the difference between the tax liability determined for the immediately
preceding month minus the amount of tax previously paid for that month.
Beginning January 1, 1999, each seller that had a total tax liability after subtracting
the tax payments made to the Secretary of State under the Act or the Sales
Tax Act, 1933 PA 167, MCL 205.51 to 205.78, or after subtracting the tax
credits available under Section 6a of the general Sales Tax Act, 1933 PA
167, MCL 205.56a, in the immediately preceding calendar year of $720,000
or more must remit to the Department, by an electronic funds transfer method
approved by the Commissioner of Revenue on or before the fifteenth day of
the month, an amount equal to 50% of the taxpayer's liability under this
Act for the same month in the immediately preceding calendar year, or 50%
of the actual liability for the month being reported, whichever is less,
plus a reconciliation payment equal to the difference between the tax liability
determined for the immediately preceding month minus the amount of tax previously
paid for that month. Additionally, the seller must remit to the Department,
by an electronic funds transfer method approved by the Commissioner of Revenue
on or before the last day of the month, an amount equal to 50% of the taxpayer's
liability under this Act for the same month in the immediately preceding
calendar year, or 50% of the actual liability for the month being reported,
whichever is less.
If considered necessary to insure payment of the tax or to provide a more efficient
administration, the Revenue Commissioner may require and prescribe the filing
of returns and payment of the tax for other than monthly periods. The tax
imposed under the Act must accrue to the state on the last day of each calendar
month.
D. Amendment to the General Sales Tax Act
Effective June 24, 2003, Public Act No. 25 of 2003 states that a domestic corporation,
a foreign corporation, or other business entity authorized to transact business
in this state that submits a certificate of dissolution or requests a certificate
of withdrawal from this state must request a certificate from the Department
stating that taxes are not due under Section 27a of 1941 PA 122, MCL 205.27a,
not more than 60 days after submitting the certificate of dissolution or
requesting the certificate of withdrawal. A corporation or other business
entity that does not request a certificate stating that taxes are not due
is subject to the same penalties under Section 24 of 1941 PA 122, MCL 205.24,
that a taxpayer would be subject to for failure to file a return.
E. Dissolving Business Entities - Certificates Stating
that Taxes Are Not Due
Effective October 1, 2003, Public Act No. 46 of 2003 amends the Income Tax Act
to provide that a domestic corporation, a foreign corporation, or other business
entity authorized to transact business in this state that submits a certificate
of dissolution or requests a certificate of withdrawal from this state must
request a certificate from the revenue division of the Department if treasury
stating that taxes are not due under Section 27a of 1941 PA 122, MCL 205.27a,
not more than 60 days after submi |
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