The Legislature this week finalized two bills - SB 748 and HB 5122 - which will allow residents living in renaissance zones before January 1, 2012 to continue to be eligible for the renaissance zone exemption under the Corporate Income Tax. The law to eliminate the Michigan Business Tax and instead tax businesses as part of the Corporate Income Tax also eliminated the exemptions for renaissance zones that were in the income tax. As such, any taxpayer (business or resident) in a renaissance zone will have to pay the 4.35% state income tax as of January 1, 2012 if they do not have a signed contract with the MEDC. These bills fix that problem for residents; it allows a taxpayer in a qualified renaissance zone to deduct income, dividends, capital gains, and on-line or instant lottery winnings, if the taxpayer were a resident of tje renaissance zone for 183 consecutive days and his or her gross income did not exceed $1.0 million, and the renaissance zone had been designated as a renaissance zone before January 1, 2012. The bills are on their way to the Governor, who is expect to sign them.
Andy Schor is the Assistant Director of State Affairs for the Michigan Municipal League. Contact him at (517) 908-0300 or by email at aschor@mml.org.
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