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HOUSE BILL NO. 6134
A bill to amend 1967 PA 281, entitled
"Income tax act of 1967,"
by amending sections 623 and 695 (MCL 206.623 and 206.695), section
623 as amended by 2021 PA 135 and section 695 as amended by 2025 PA
24.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 623. (1) Except as otherwise provided in this part, there 1
is levied and imposed a corporate income tax on every taxpayer with 2
business activity within this state or ownership interest or 3
June 25, 2026, Introduced by Reps. Wegela, Rheingans, Weiss, McKinney, Dievendorf,
MacDonell, Myers -Phillips and Wilson and referred to Committee on Economic
Competitiveness.
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beneficial interest in a flow-through entity that has business 1
activity in this state unless prohibited by 15 USC 381 to 384. The 2
corporate income tax is imposed on the corporate income tax base, 3
after allocation or apportionment to this state, at the rate of 4
following rates in the following circumstances: 5
(a) Before October 1, 2026, 6.0%. 6
(b) Beginning on and after October 1, 2026, 10.0%. 7
(2) The corporate income tax base means a taxpayer's business 8
income subject to the following adjustments, before allocation or 9
apportionment, and the adjustment in subsection (4) after 10
allocation or apportionment: 11
(a) Add interest income and dividends derived from obligations 12
or securities of states other than this state, in the same amount 13
that was excluded from federal taxable income, less the related 14
portion of expenses not deducted in computing federal taxable 15
income because of sections 265 and 291 of the internal revenue 16
code. 17
(b) Add all taxes on or measured by net income including the 18
tax imposed under this part to the extent that the taxes were 19
deducted in arriving at federal taxable income including any direct 20
or indirect allocated share of taxes paid by a flow-through entity 21
under part 4. 22
(c) Add any carryback or carryover of a net operating loss to 23
the extent deducted in arriving at federal taxable income. 24
(d) To the extent included in federal taxable income, deduct 25
dividends and royalties received from persons other than United 26
States persons and foreign operating entities, including, but not 27
limited to, amounts determined under section 78 of the internal 28
revenue code or sections 951 to 965 of the internal revenue code. 29
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(e) Except as otherwise provided under this subdivision, to 1
the extent deducted in arriving at federal taxable income, add any 2
royalty, interest, or other expense paid to a person related to the 3
taxpayer by ownership or control for the use of an intangible asset 4
if the person is not included in the taxpayer's unitary business 5
group. The addition of any royalty, interest, or other expense 6
described under this subdivision is not required to be added if the 7
taxpayer can demonstrate that the transaction has a nontax business 8
purpose, is conducted with arm's-length pricing and rates and terms 9
as applied in accordance with sections 482 and 1274(d) of the 10
internal revenue code, and 1 of the following is true: 11
(i) The transaction is a pass through of another transaction 12
between a third party and the related person with comparable rates 13
and terms. 14
(ii) An addition would result in double taxation. For purposes 15
of this subparagraph, double taxation exists if the transaction is 16
subject to tax in another jurisdiction. 17
(iii) An addition would be unreasonable as determined by the 18
state treasurer. 19
(iv) The related person recipient of the transaction is 20
organized under the laws of a foreign nation which has in force a 21
comprehensive income tax treaty with the United States. 22
(f) To the extent included in federal taxable income, deduct 23
interest income derived from United States obligations. 24
(g) Eliminate all of the following: 25
(i) Income from producing oil and gas to the extent included in 26
federal taxable income. 27
(ii) Expenses of producing oil and gas to the extent deducted 28
in arriving at federal taxable income. 29
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(h) For a qualified taxpayer, eliminate all of the following: 1
(i) Income derived from a mineral to the extent included in 2
federal taxable income. 3
(ii) Expenses related to the income deductible under 4
subparagraph (i) to the extent deducted in arriving at federal 5
taxable income. 6
(3) For purposes of subsection (2), the business income of a 7
unitary business group is the sum of the business income of each 8
person included in the unitary business group less any items of 9
income and related deductions arising from transactions including 10
dividends between persons included in the unitary business group. 11
(4) Deduct any available business loss incurred after December 12
31, 2011. As used in this subsection, "business loss" means a 13
negative business income taxable amount after allocation or 14
apportionment. For purposes of this subsection, a taxpayer that 15
acquires the assets of another corporation in a transaction 16
described under section 381(a)(1) or (2) of the internal revenue 17
code may deduct any business loss attributable to that distributor 18
or transferor corporation. The business loss shall must be carried 19
forward to the year immediately succeeding the loss year as an 20
offset to the allocated or apportioned corporate income tax base, 21
then successively to the next 9 taxable years following the loss 22
year or until the loss is used up, whichever occurs first. 23
(5) As used in this section, "oil and gas" means oil and gas 24
that is subject to severance tax under 1929 PA 48, MCL 205.301 to 25
205.317. 26
Sec. 695. (1) Beginning with the 2022-2023 state fiscal year 27
through the 2023-2024 state fiscal year, from the tax levied under 28
this part, the revenue collected under this part must be deposited 29
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in the following manner: 1
(a) Up to $1,200,000,000.00 to the general fund. 2
(b) After the deposit under subdivision (a), up to 3
$50,000,000.00, if available, to the Michigan housing and community 4
development fund created in section 58a of the state housing 5
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 6
(c) After the deposits under subdivisions (a) and (b), up to 7
$50,000,000.00, if available, to the revitalization and placemaking 8
fund created in section 696. 9
(d) After the deposits under subdivisions (a), (b), and (c), 10
up to $500,000,000.00, if available, to the strategic outreach and 11
attraction reserve fund created in section 4 of the Michigan trust 12
fund act, 2000 PA 489, MCL 12.254. 13
(e) The balance of any revenue collected under this part after 14
the deposits under subdivisions (a), (b), (c), and (d), to the 15
general fund. 16
(2) For 2024-2025 state fiscal year only, from the tax levied 17
under this part, the revenue collected under this part must be 18
deposited in the following manner: 19
(a) Up to $1,200,000,000.00 to the general fund. 20
(b) After the deposit under subdivision (a), up to 21
$50,000,000.00, if available, to the Michigan housing and community 22
development fund created in section 58a of the state housing 23
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 24
(c) After the deposits under subdivisions (a) and (b), up to 25
$50,000,000.00, if available, to the revitalization and placemaking 26
fund created in section 696. 27
(d) After the deposits under subdivisions (a), (b), and (c), 28
up to $250,000,000.00, if available, to the healthy Michigan fund 29
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created in section 5953 of the public health code, 1978 PA 368, MCL 1
333.5953. 2
(e) The balance of any revenue collected under this part after 3
the deposits under subdivisions (a), (b), (c), and (d), to the 4
general fund. 5
(1) (3) For the 2025-2026 state fiscal year only, from the tax 6
levied under this part, the revenue collected under this part must 7
be deposited in the following manner: 8
(a) Up to $1,200,000,000.00 to the general fund. 9
(b) After the deposit under subdivision (a), up to 10
$50,000,000.00, if available, to the Michigan housing and community 11
development fund created in section 58a of the state housing 12
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 13
(c) After the deposits under subdivisions (a) and (b), up to 14
$688,000,000.00, if available, to the neighborhood road roads fund 15
created in section 13c of 1951 PA 51, MCL 247.663c. 16
(d) The balance of the revenue collected under this part after 17
the deposits under subdivisions (a) through (c) to the general 18
fund. 19
(2) (4) For the 2026-2027 state fiscal year only, from the tax 20
levied under this part, the revenue collected under this part must 21
be deposited in the following manner: 22
(a) Up to $1,200,000,000.00 to the general fund. 23
(b) After the deposit under subdivision (a), up to 24
$50,000,000.00, if available, to the Michigan housing and community 25
development fund created in section 58a of the state housing 26
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 27
(c) After the deposits under subdivisions (a) and (b), up to 28
$776,000,000.00, if available, to the neighborhood road roads fund 29
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created in section 13c of 1951 PA 51, MCL 247.663c. 1
(d) The balance of the revenue collected under this part after 2
the deposits under subdivisions (a) through (c) to the general 3
fund.state school aid fund created in section 11 of article IX of 4
the state constitution of 1963. 5
(3) (5) For the 2027-2028 state fiscal year only, from the tax 6
levied under this part, the revenue collected under this part must 7
be deposited in the following manner: 8
(a) Up to $1,200,000,000.00 to the general fund. 9
(b) After the deposit under subdivision (a), up to 10
$50,000,000.00, if available, to the Michigan housing and community 11
development fund created in section 58a of the state housing 12
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 13
(c) After the deposits under subdivisions (a) and (b), up to 14
$864,000,000.00, if available, to the neighborhood road roads fund 15
created in section 13c of 1951 PA 51, MCL 247.663c. 16
(d) The balance of the revenue collected under this part after 17
the deposits under subdivisions (a) through (c) to the general 18
fund.state school aid fund created in section 11 of article IX of 19
the state constitution of 1963. 20
(4) (6) For the 2028-2029 state fiscal year only, from the tax 21
levied under this part, the revenue collected under this part must 22
be deposited in the following manner: 23
(a) Up to $1,200,000,000.00 to the general fund. 24
(b) After the deposit under subdivision (a), up to 25
$50,000,000.00, if available, to the Michigan housing and community 26
development fund created in section 58a of the state housing 27
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 28
(c) After the deposits under subdivisions (a) and (b), up to 29
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Final Page
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$952,000,000.00, if available, to the neighborhood road roads fund 1
created in section 13c of 1951 PA 51, MCL 247.663c. 2
(d) The balance of the revenue collected under this part after 3
the deposits under subdivisions (a) through (c) to the general 4
fund.state school aid fund created in section 11 of article IX of 5
the state constitution of 1963. 6
(5) (7) Beginning with the 2029-2030 state fiscal year, from 7
the tax levied under this part, the revenue collected under this 8
part must be deposited in the following manner: 9
(a) Up to $1,200,000,000.00 to the general fund. 10
(b) After the deposit under subdivision (a), up to 11
$50,000,000.00, if available, to the Michigan housing and community 12
development fund created in section 58a of the state housing 13
development authority act of 1966, 1966 PA 346, MCL 125.1458a. 14
(c) After the deposits under subdivisions (a) and (b), up to 15
$1,040,000,000.00, if available, to the neighborhood road roads 16
fund created in section 13c of 1951 PA 51, MCL 247.663c. 17
(d) The balance of the revenue collected under this part after 18
the deposits under subdivisions (a) through (c) to the general 19
fund.state school aid fund created in section 11 of article IX of 20
the state constitution of 1963. 21