SENATE BILL NO. 740


   September 23, 1999, Introduced by Senators JAYE, SHUGARS, 
        GOUGEON, NORTH and BULLARD and referred to the Committee 
        on Finance.



        A bill to amend 1964 PA 284, entitled

   "City income tax act,"

   by amending section 32 of chapter 2 (MCL 141.632).

               THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 1                                CHAPTER 2

 2         Sec. 32.  The following payments and benefits received by

 3    any person are not subject to the tax:

 4         (a) Gifts and bequests.

 5         (b) Proceeds of insurance, annuities, pensions, and retire-

 6    ment benefits.  Amounts received for personal injuries, sickness,

 7    or disability are excluded from taxable income only to the extent

 8     provided  THOSE AMOUNTS ARE EXCLUDED by the
             federal internal

 9    revenue code.






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 1         (c) Welfare relief, unemployment benefits including

 2    supplemental unemployment benefits, and workmen's compensation or

 3    similar payments from whatever source derived.

 4         (d) Amounts received by charitable, religious, educational,

 5     and  OR other similar nonprofit organizations
              which  THAT are

 6    exempt from taxation under the federal internal revenue code.

 7         (e) Amounts received by supplemental unemployment benefit

 8    trusts or pension, profit sharing,  and  OR stock
             bonus trusts

 9    THAT ARE qualified and exempt under the federal internal revenue

10    code.

11         (f) Interest from obligations of the United States, the

12    states, or subordinate units of government of the states and

13    gains or losses on the sales of obligations of the United

14    States.

15         (g) Net profits of financial institutions and insurance

16    companies.

17         (h) Amounts paid to an employee as reimbursement for

18    expenses necessarily and actually incurred by  him 
             THE EMPLOYEE

19    in the actual performance of his OR HER services and deductible

20    as such by the employer.

21         (i) Compensation received for service in the armed forces of

22    the United States.

23         (J) FOR TAX YEARS BEGINNING AFTER 1999, INCOME RECEIVED AS A

24    COMMISSION FROM THE SALE OF REAL PROPERTY.









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