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SENATE BILL NO. 1083
A bill to amend 1941 PA 122, entitled
"An act to establish the revenue collection duties of the
department of treasury; to prescribe its powers and duties as the
revenue collection agency of this state; to prescribe certain
powers and duties of the state treasurer; to establish the
collection duties of certain other state departments for money or
accounts owed to this state; to regulate the importation, stamping,
and disposition of certain tobacco products; to provide for the
transfer of powers and duties now vested in certain other state
boards, commissions, departments, and offices; to prescribe certain
duties of and require certain reports from the department of
treasury; to provide procedures for the payment, administration,
audit, assessment, levy of interests or penalties on, and appeals
of taxes and tax liability; to prescribe its powers and duties if
July 01, 2026, Introduced by Senators VICTORY, WEBBER, DALEY, BELLINO, MCBROOM,
HUIZENGA, HAUCK, BUMSTEAD, THEIS, LAUWERS, NESBITT and OUTMAN and
referred to Committee on Appropriations.
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an agreement to act as agent for a city to administer, collect, and
enforce the city income tax act on behalf of a city is entered into
with any city; to provide an appropriation; to abolish the state
board of tax administration; to prescribe penalties and provide
remedies; and to declare the effect of this act,"
by amending section 30 (MCL 205.30), as amended by 2016 PA 267.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 30. (1) The department shall credit or refund an 1
overpayment of taxes; taxes, penalties, and interest erroneously 2
assessed and collected; and taxes, penalties, and interest that are 3
found unjustly assessed, excessive in amount, or wrongfully 4
collected with interest at the rate calculated under section 23 for 5
deficiencies in tax payments. 6
(2) A taxpayer who paid a tax that the taxpayer claims is not 7
due may petition the department for refund of the amount paid 8
within the time period specified as the statute of limitations in 9
section 27a. If a tax return reflects an overpayment or credits in 10
excess of the tax, the declaration of that fact on the return 11
constitutes a claim for refund. If the department agrees the claim 12
is valid, the amount of overpayment, penalties, and interest shall 13
be first applied to any known liability as provided in section 30a, 14
and the excess, if any, shall be refunded to the taxpayer or 15
credited, at the taxpayer's request, against any current or 16
subsequent tax liability. Except claims for refunds, other than 17
those made under part 1 of the income tax act of 1967, 1967 PA 281, 18
MCL 206.1 to 206.532, that have not been approved, denied, or 19
adjusted within 1 year of the date received may be treated as 20
denied at the election of the taxpayer, and may be appealed by the 21
taxpayer in accordance with section 22. 22
(3) The department shall certify a refund to the state 23
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disbursing authority who shall pay the amount out of the proceeds 1
of the tax in accordance with the accounting laws of the state. 2
Interest at the rate calculated under section 23 for deficiencies 3
in tax payments regarding those refunds shall be added to the 4
refund commencing 45 30 days after the claim is filed or 45 30 days 5
after the date established by law for the filing of the return, 6
whichever is later. Interest on refunds intercepted and applied as 7
provided in section 30a shall cease as of the date of interception. 8
Refunds for amounts of less than $1.00 shall not be paid. 9
(4) Beginning January 1, 2014 through December 31, 2024, in 10
addition to and separate from the interest added to a refund under 11
subsection (3), for refunds for taxes imposed under part 1 of the 12
income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532, the 13
state disbursing authority shall add interest to refunds that are 14
not paid within 1 of the following dates for the applicable tax 15
year: 16
(a) May 1, for returns received by the department on or before 17
March 1 of the applicable tax year. 18
(b) Sixty days from the date the return was received by the 19
department for returns received by the department after March 1 of 20
the applicable tax year. 21
(5) Interest described in subsection (4) shall be paid at a 22
rate of 3% per annum, calculated from the date the original return 23
was due under section 315(1) of the income tax act of 1967, 1967 PA 24
281, MCL 206.315, and until a date preceding the date of the refund 25
by not more than 7 days, if all of the following conditions are 26
met: 27
(a) The refund is due on an original return which was timely 28
filed under section 315(1) of the income tax act of 1967, 1967 PA 29
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281, MCL 206.315. 1
(b) The refund is not adjusted by the department. 2
(c) The return is not subject to section 27a(3) or (4) except 3
for audit by the department. 4
(d) The return is complete for processing purposes with no 5
calculation errors and contains all required information as 6
prescribed by the department under section 315(1)(d) of the income 7
tax act of 1967, 1967 PA 281, MCL 206.315, including any state and 8
federal returns, forms, or schedules necessary to process the 9
return. 10
(e) The taxpayer who has filed a complete return under 11
subdivision (d) has complied with the department's request, if any, 12
for additional documentation or information within 30 days of that 13
request. 14
(f) No portion of the refund is subject to interception under 15
section 30a. 16
(g) The amount to be refunded is more than $1.00. 17
(6) Beginning January 1, 2025 and subject to subsection (7), 18
in addition to and separate from the interest added to a refund 19
under subsection (3), for refunds for taxes imposed under part 1 of 20
the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.532, the 21
state disbursing authority shall add interest to refunds that are 22
not paid as follows in the following circumstances: 23
(a) Within 30 days from the date the return was received by 24
the department, interest must be paid at 1 percentage point above 25
the adjusted prime rate per annum calculated from day 31, until a 26
date preceding the date of the refund but for not more than 30 27
days. 28
(b) Within 60 days from the date the return was received by 29
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the department, in addition to the interest added under subdivision 1
(a), interest must be paid at 3 percentage points above the 2
adjusted prime rate per annum calculated from day 61, until a date 3
preceding the date of the refund but for not more than 30 days. 4
(c) Within 90 days from the date the return was received by 5
the department, in addition to the interest added under 6
subdivisions (a) and (b), $100.00 must be added to the refund. 7
(7) Interest described under subsection (6) must not be 8
applied beginning on day 31 following the date the return was 9
received by the department if the delay is a result of the 10
department investigating a suspected fraudulent claim, needing to 11
verify identification, or finding material errors in the return, or 12
the return was not filed in a timely manner under section 315(1) of 13
the income tax act of 1967, 1967 PA 281, MCL 206.315, and the 14
department has sent a written notice to the taxpayer before day 31 15
specifying the reason for the delay. Except as otherwise provided 16
under this subsection, interest must be paid as provided under 17
subsection (6) if all of the following conditions are met: 18
(a) The refund is due on an original return which was timely 19
filed under section 315(1) of the income tax act of 1967, 1967 PA 20
281, MCL 206.315. 21
(b) The refund is not adjusted by the department. 22
(c) The return is complete for processing purposes with no 23
calculation errors and contains all required information as 24
prescribed by the department under section 315(1)(d) of the income 25
tax act of 1967, 1967 PA 281, MCL 206.315, including any state and 26
federal returns, forms, or schedules necessary to process the 27
return. 28
(d) The taxpayer who has filed a complete return under 29
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subdivision (c) has complied with the department's request, if any, 1
for additional documentation or information within 30 days of that 2
request. 3
(e) The amount to be refunded is more than $1.00. 4
(8) (6) Beginning January 1, 2015, in In addition to and 5
separate from the interest added to a refund under subsection (3), 6
for refunds for taxes imposed under the Michigan business tax act, 7
2007 PA 36, MCL 208.1101 to 208.1601, 208.1519, the state 8
disbursing authority shall add interest to refunds that are not 9
paid within 90 days after the claim is approved or 90 days after 10
the date established by law for filing the return, whichever is 11
later. Interest described in this subsection shall must be paid at 12
a rate of 3% per annum for each day the refund is not issued within 13
the time frame required in this subsection if all of the following 14
conditions are met: 15
(a) The refund is claimed on an original return which was 16
timely filed under section 505(1) of the Michigan business tax act, 17
2007 PA 36, MCL 208.1505. 18
(b) The refund is not adjusted by the department. 19
(c) The refund is not claimed by a taxpayer filing as a 20
unitary business group. 21
(d) The return is not subject to section 27a(3) or (4) except 22
for audit by the department. 23
(e) The return is complete for processing purposes with no 24
calculation errors and contains all required information as 25
prescribed by the department under section 507 or 509 of the 26
Michigan business tax act, 2007 PA 36, MCL 208.1507 and 208.1509, 27
including any state and federal returns, forms, or schedules 28
necessary to process the return. 29
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(f) The taxpayer who has filed a complete return under 1
subdivision (e) has complied with the department's request, if any, 2
for additional documentation or information within 30 days of that 3
request. 4
(g) No portion of the refund is subject to interception under 5
section 30a. 6
(h) The amount to be refunded is more than $10.00. 7
(9) (7) Beginning January 1, 2017, the The interest 8
calculations in subsections (3), (4), (5), and (6) under this 9
section also apply to refunds of credits authorized under section 10
36109 of the natural resources and environmental protection act, 11
1994 PA 451, MCL 324.36109, for contracts that have been approved 12
and processed by the department of agriculture and rural 13
development and forwarded to the department. If the state 14
disbursing authority does not pay or refund a credit described in 15
this subsection within 45 days from the date the return was 16
received by the department, the department shall notify the 17
taxpayer of the status of the return and whether the taxpayer has 18
filed a complete return. 19
(10) Beginning 30 days after the effective date of the 20
amendatory act that added this subsection, the department shall 21
submit a monthly report to the legislature detailing refund 22
processing times, backlog volumes, and the number of returns for 23
which additional interest and payments were required under this 24
section for the failure to process and issue the refund within the 25
specified time frames. 26
(11) As used in this section, "adjusted prime rate" means that 27
term as defined in section 23. 28