Budget & Taxes (Business Taxes)

HB 5517 creates a $0.005 per returnable beverage container tax credit for distributors who charge a deposit on containers, effective for tax years beginning January 1, 2026. The credit adjusts annually based on the U.S. Consumer Price Index starting in 2027. Distributors must attach a specific report (per 1976 IL 1) with their tax return to claim the credit, and any excess credit is refunded. This directly affects beverage distributors handling returnable containers in Michigan.

House Bill 4503 modifies Michigan's corporate income tax credit program for state historic preservation. It allows qualified taxpayers to claim a credit for expenses incurred rehabilitating historic resources, with credit amounts varying between 25% and 30% of eligible costs depending on the type of resource. The bill also streamlines the application process by setting new approval timelines for the state historic preservation office. Significantly, it increases the total annual cap on these credits from $5 million to $100 million starting January 1, 2026, with specific allocations for different categories of historic properties.

SB 557 creates tax credits for businesses in Michigan's designated aerospace defense zones. It offers a 30% credit on qualifying research and development expenses (capped at $10 million per business annually) and a 20% credit on storage/maintenance costs for finished goods inventory (capped at $1 million per business annually). To qualify, businesses must be designated by the Michigan Strategic Fund as defense contractors, aerospace manufacturers, or tiered suppliers with under $5 million in annual revenue. The credits require certification from the Strategic Fund, have annual spending limits ($100 million for R&D credits, $25 million for inventory credits), and cannot be claimed on the same expenses as other credits. This bill directly affects small-to-midsize aerospace and defense businesses operating within designated zones in Michigan.

SB 117 repeals specific sections of Michigan's corporate income tax provisions (MCL 206.1-206.532, 206.701-206.725, and 206.801-206.847) that governed corporate tax rates and reporting. The bill directly affects corporations previously subject to these repealed tax rules by eliminating those requirements. Key mechanism: it removes the referenced corporate tax sections from Michigan's tax code without replacing them. This is a procedural repeal of existing corporate tax provisions, not a new tax or personal income tax change. The bill is in early committee review (introduced March 5, 2025).

SB 514 creates a corporate income tax credit for beverage distributors who charge deposits on returnable containers. It allows eligible distributors to claim a $0.005 credit per container sold starting in 2026, with annual adjustments based on the U.S. Consumer Price Index beginning in 2027. Distributors must attach a specific report to their tax return to claim the credit, and any unused credit amount is refundable. The bill directly affects beverage distributors who originate container deposits and depends on the passage of companion bill SB 512 to take effect.

HB 5292 allows corporations with pre-2012 approved tax credits (for job creation or investment) to claim the remaining unused portion against their corporate income tax liability starting in 2026, spread equally over 10 years. To qualify, businesses must maintain at least 95% of their full-time jobs (35+ hours weekly with payroll taxes withheld) as of September 30, 2025, each tax year. The bill also repeals Michigan’s Business Tax Act (2007 PA 36) for tax years beginning after December 31, 2025, ending that separate tax system. This directly affects corporations holding unused credits from older economic development programs.