June 27, 2008, Introduced by Rep. Bieda and referred to the Committee on Tax Policy.
A bill to amend 2007 PA 36, entitled
"Michigan business tax act,"
by amending section 265 (MCL 208.1265), as amended by 2007 PA 145.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 265. (1) For a financial institution, tax base means the
financial institution's net capital. Net capital means equity
capital as computed in accordance with generally accepted
accounting principles less goodwill and the average daily book
value of United States obligations and Michigan obligations. If the
financial institution does not maintain its books and records in
accordance with generally accepted accounting principles, net
capital shall be computed in accordance with the books and records
used by the financial institution, so long as the method fairly
reflects the financial institution's net capital for purposes of
the tax levied by this chapter. Net capital does not include up to
125% of the minimum regulatory capitalization requirements of a
person subject to the tax imposed under chapter 2A. As used in this
subsection, "equity capital" means consolidated capital exclusive
of the capital of any foreign operating entity or any affiliated
member that is not a United States person or does not have
permanent establishment in the United States.
(2) Net capital shall be determined by adding the financial
institution's net capital as of the close of the current tax year
and preceding 4 tax years and dividing the resulting sum by 5. If a
financial institution has not been in existence for a period of 5
tax years, net capital shall be determined by adding together the
financial institution's net capital for the number of tax years the
financial institution has been in existence and dividing the
resulting sum by the number of years the financial institution has
been in existence. For purposes of this section, a partial year
shall be treated as a full year.
(3) For purposes of this section, each of the following
applies:
(a) A change in identity, form, or place of organization of 1
financial institution shall be treated as if a single financial
institution had been in existence for the entire tax year in which
the change occurred and each tax year after the change.
(b) The combination of 2 or more financial institutions into 1
shall be treated as if the constituent financial institutions had
been a single financial institution in existence for the entire tax
year in which the combination occurred and each tax year after the
combination, and the book values and deductions for United States
obligations and Michigan obligations of the constituent
institutions shall be combined. A combination shall include any
acquisition required to be accounted for by the surviving financial
institution in accordance with generally accepted accounting
principles or a statutory merger or consolidation.