HOUSE BILL No. 4091


     January 28, 1997, Introduced by Rep. Curtis and referred to the Committee on Tax Policy.


        A bill to amend 1975 PA 228, entitled

   "Single business tax act,"

   by amending section 38c (MCL 208.38c), as amended by 1994 PA

   231.

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1         Sec. 38c.  (1) For the 1989  through 1997 tax years  TAX

 2    YEAR AND EACH TAX YEAR AFTER 1989 and subject to the limitations

 3    in subsections (2), (3), and (5), a taxpayer who does not claim a

 4    credit under section 261 of the income tax act of 1967,  Act

 5     No. 281 of the Public Acts of 1967, being section 206.261 of the

 6     Michigan Compiled Laws  1967 PA 281, MCL 206.261, may credit

 7    against the tax imposed by this act 50% of the amount the tax-

 8    payer contributes during the taxable year to an endowment fund of

 9    a community foundation or, for the 1992  through 1997 tax years 

10    TAX YEAR AND EACH TAX YEAR AFTER 1992 and subject to the


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 1    limitations in subsections (2) and (4), a taxpayer may credit

 2    against the tax imposed by this act 50% of the cash amount the

 3    taxpayer contributes during the taxable year to a shelter for

 4    homeless persons, food kitchen, food bank, or other entity, the

 5    primary purpose of which is to provide overnight accommodation,

 6    food, or meals to persons who are indigent if a contribution to

 7    that entity is tax deductible for the donor under the internal

 8    revenue code.

 9         (2) The credit allowed by this section for a contribution to

10    a community foundation shall not exceed 5% of the taxpayer's tax

11    liability for the tax year before claiming any credits allowed by

12    this act or $5,000.00, whichever is less.  For tax years begin-

13    ning after December 31, 1991, a taxpayer may claim an additional

14    credit under this section not to exceed 5% of the taxpayer's tax

15    liability for the tax year before claiming any credits allowed by

16    this act or $5,000.00, whichever is less, for total cash contri-

17    butions made in the tax year to shelters for homeless persons,

18    food kitchens, food banks, and, except for community foundations,

19    other entities allowed under subsection (1).  The credits allowed

20    by this section are nonrefundable so that a taxpayer shall not

21    claim under this section a total credit amount that reduces the

22    taxpayer's tax liability to less than zero.

23         (3) As used in this section, "community foundation" means an

24    organization that applies for certification on or before April 1

25    of the tax year for which the taxpayer is claiming the credit and

26    that the department certifies for that tax year as meeting all of

27    the following requirements:



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 1         (a) Qualifies for exemption from federal income taxation

 2    under section 501(c)(3) of the internal revenue code, 26

 3    U.S.C. 501.

 4         (b) Supports a broad range of charitable activities within

 5    the specific geographic area of this state that it serves, such

 6    as a municipality or county.

 7         (c) Maintains an ongoing program to attract new endowment

 8    funds by seeking gifts and bequests from a wide range of poten-

 9    tial donors in the community or area served.

10         (d) Is publicly supported as defined by the regulations of

11    the United States department of treasury, 26

12    C.F.R. 1.170A-9(e)(10).

13         (e) Is not a supporting organization as defined under sec-

14    tion 509(a)(3) of the internal revenue code and the regulations

15    of the United States department of treasury, 26 C.F.R. 1.509(a)-4

16    and 1.509(a)-5.

17         (f) Meets the requirements for treatment as a single entity

18    contained in the regulations of the United States department of

19    treasury, 26 C.F.R. 1.170A-9(e)(11).

20         (g) Is incorporated or established as a trust before

21    September 1 of the year immediately preceding the tax year for

22    which the credit is claimed.

23         (4) An entity other than a community foundation may request

24    that the department determine if a contribution to that entity

25    qualifies for the credit under this section.  The department

26    shall make a determination and respond to a request no later than

27    30 days after the department receives the request.



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 1         (5) On or before July 1 of each year, the department shall

 2    report to the house of representatives committee on taxation and

 3    the senate committee on finance the total amount of tax credits

 4    claimed under this section and under section 261 of the income

 5    tax act of 1967,  Act No. 281 of the Public Acts of 1967  1967 PA

 6    281, MCL 206.261, for the immediately preceding tax year.












































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