Advocacy News – Nov. 3, 2023
What happened: Earlier this week, the Michigan House of Representatives overwhelmingly passed a bipartisan package of bills that would create a Research and Development (R&D) Tax Credit for companies that are eligible for the federal credit. Sponsored by Reps. Hood, Martus, Rogers, Puri, and VanWoerkom, the House-passed version of House Bills 5099-5102, and 4368 accomplish the below:
An eligible business may claim the below credits based on the size of the business and collaboration with an eligible Michigan-based research university.
- With 250 or more employees: 10%, credit amount cannot exceed $2,000,000
- Less than 250 employees: 15%, credit cannot exceed $250,000
- May claim an additional 5% credit if working with a research university in the state, but the credit cannot exceed $200,000.
In addition, a business that has existing R&D spending in the state may receive a three-percent credit on expenses within the same tax year. To be eligible, a taxpayer must submit a claim to the Michigan Department of Treasury for a credit on or before March 15. As outlined, the R&D credit is refundable, but the state is limited to approving $100 million in credits. Should the total amount filed exceed the outlined threshold of $100 million, Treasury must issue a notice that the amount originally filed for will be prorated. House Bill 5100 details the process and amount of proration.
What’s next: Now sitting on the Michigan Senate floor awaiting a vote, the bills as passed by the House are a significant improvement from what was originally introduced. The MI Chamber is looking forward to the continued movement of this legislation.
Go deeper: To view the MI Chamber’s analysis of the bills as written, click here.
For questions or more information, please contact Leah Robinson at lrobinson@michamber.com