A few key tax issues saw action this week in the Michigan legislature. A summary of this action is as follows:
Partnership Audits – SB 1035 passed the Senate Finance Committee this week unanimously with technical changes requested by the Department of Treasury. After committee, Treasury requested further changes that have been incorporated and into will be adopted on the Senate Floor next week.
Solar Energy Equipment Personal Property Tax Alternative – Introduced this week was legislation to exempt commercial grade solar energy equipment from personal property tax and impose a new tax based on energy output. SB 1105 and SB 1106 will streamline the process of valuation and avoid the debacle wind energy valuation has experienced that has been argued about in the courts for 6 years now.
Interest Expense Deduction Limitation (163j) Fix – After several months of back and forth on draft guidance between the Department of Treasury and the Michigan Chamber, SB 1102 was introduced to begin a dialogue on an alternative application of section 163j of the Internal Revenue Code (IRC) here on the State level. In June, the Michigan Department of Treasury issued a notice that instructs taxpayers how to treat the IRC’s interest expense deduction limitation the Michigan Chamber disagrees with. SB 1102 represents a more favorable treatment of 163j for Michigan taxpayers.
For more information on these issues or other tax related items, please contact Dan Papineau at dpapineau@michamber.com