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, which will involve an application and approval process established by the Fund.

The bill also outlines the criteria 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. Additionally, the investment must not be made in a business where the investor or a family member has a fiduciary relationship or is an employee or owner. If the credit exceeds the taxpayer's tax liability for the year, the excess can be carried forward for up to 10 years. The bill emphasizes the legislature's intent to appropriate sufficient funds to compensate for any revenue loss resulting from this tax credit.

Statutes affected:
Substitute (H-2): 206.1, 206.847
House Introduced Bill: 206.1, 206.847