HOUSE BILL No. 5403

October 31, 2007, Introduced by Rep. Gillard and referred to the Committee on Tax Policy.

     A bill to amend 2007 PA 36, entitled

"Michigan business tax act,"

by amending section 235 (MCL 208.1235).

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 235. (1) Each An insurance company shall pay a the tax

determined levied and imposed under this chapter.

     (2) The An insurance company shall pay a tax imposed by this

chapter on each insurance company shall be a tax equal to 1.25% of

gross direct premiums written on property or risk located or

residing in this state. Direct premiums do not include any of the

following:

     (a) Premiums on policies not taken.

     (b) Returned premiums on canceled policies.

     (c) Receipts from the sale of annuities.

     (d) Receipts on reinsurance premiums if the tax has been paid

on the original premiums.

     (e) The first $190,000,000.00 of disability insurance premiums

written in this state, other than credit insurance and disability

income insurance premiums, of each insurance company subject to tax

under this chapter. This exemption shall be reduced by $2.00 for

each $1.00 by which the insurance company's gross direct premiums

from insurance carrier services in this state and outside this

state exceed $280,000,000.00.

     (3) The tax calculated levied and imposed under this chapter

is in lieu of all other privilege or franchise fees or taxes

imposed by this act or any other law of this state, except taxes on

real and personal property, taxes collected under the general sales

tax act, 1933 PA 167, MCL 205.1 to 205.78, and taxes collected

under the use tax act, 1937 PA 94, MCL 205.91 to 205.111, and

except as otherwise provided in the insurance code of 1956, 1956 PA

218, MCL 500.100 to 500.8302.

     Enacting section 1. This amendatory act takes effect January

1, 2008 and applies to all business activity occurring after

December 31, 2007.

     Enacting section 2. This amendatory act does not take effect

unless all of the following bills of the 94th Legislature are

enacted into law:

     (a) Senate Bill No.____ or House Bill No. 5401(request no.

05498'07 *).

     (b) Senate Bill No.____ or House Bill No. 5402(request no.

05499'07 *).

     (c) Senate Bill No.____ or House Bill No. 5404(request no.

05501'07 *).

     (d) Senate Bill No.____ or House Bill No. 5405(request no.

05502'07 *).

     (e) Senate Bill No.____ or House Bill No. 5406(request no.

05503'07 *).