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.

Additionally, the bill outlines the requirements for what constitutes a "qualified business" and a "qualified investment." A qualified business must be headquartered and domiciled in Michigan, have a majority of its employees working in the state, and derive at least 80% of its gross revenues and assets from operations within Michigan. The bill also specifies that investments cannot be made in businesses where the investor or their family members have a fiduciary relationship. If the tax credit exceeds the taxpayer's liability for the year, the excess can be carried forward for up to 10 years. The legislature intends to appropriate sufficient funds to compensate for any revenue loss resulting from this amendment.

Statutes affected:
House Introduced Bill: 206.1, 206.847