The proposed bill amends the Income Tax Act of 1967 by adding a new section that allows taxpayers to claim a tax credit for qualified investments made in certified qualified businesses starting from tax years beginning on or after January 1, 2025. Specifically, taxpayers can claim a credit equal to 50% of their qualified investment, with a maximum credit of $3,000 per qualified business and a total of $3,000 for all qualified investments in a single tax year. To qualify for this credit, taxpayers must obtain certification from the Michigan Strategic Fund within 60 days of making the investment. The Michigan Strategic Fund is tasked with developing an application and approval process for certifying these investments and ensuring compliance with state and federal securities laws.

Additionally, the bill outlines that if the credit exceeds the taxpayer's tax liability for the year, the excess amount cannot be refunded but can be carried forward for up to 10 years. The bill defines key terms such as "qualified business," which must meet specific criteria regarding its operations and revenue sources within Michigan, and "qualified investment," which must be a cash or cash-equivalent investment that does not involve a business where the investor or their family members have a fiduciary relationship. The intent of the legislature is to ensure that sufficient funds are appropriated from the state general fund to compensate for any revenue loss resulting from this new tax credit.

Statutes affected:
Senate Introduced Bill: 206.1, 206.847