SENATE BILL No. 404

 

 

April 24, 2003, Introduced by Senator EMERSON and referred to the Committee on Finance.

 

 

        

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                

                                                                                 A bill to amend 1967 PA 281, entitled                                             

                                                                                

    "Income tax act of 1967,"                                                   

                                                                                

    by amending section 351 (MCL 206.351), as amended by 1996                   

                                                                                

    PA 264.                                                                     

                                                                                

                THE PEOPLE OF THE STATE OF MICHIGAN ENACT:                      

                                                                                

1       Sec. 351.  (1) Every employer in this state required under                  

                                                                                

2   the provisions of the internal revenue code to withhold a tax on            

                                                                                

3   the compensation of an individual, except as otherwise provided,            

                                                                                

4   shall deduct and withhold a tax in an amount computed by                    

                                                                                

5   applying, except as provided by subsection  (7)  (9), the rate              

                                                                                

6   prescribed in section 51 to the remainder of the compensation               

                                                                                

7   after deducting  therefrom  from compensation the same proportion           

                                                                                

8   of the total amount of personal and dependency exemptions of the            

                                                                                

9   individual allowed under this act that the period of time covered           

                                                                                

10  by the compensation is of 1 year.  The commissioner may prescribe           

                                                                                


                                                                                

1   withholding tables that may be used by employers to compute the             

                                                                                

2   amount of tax required to be withheld.                                      

                                                                                

3       (2) Every flow-through entity in this state shall withhold a                

                                                                                

4   tax in an amount computed by applying the rate prescribed in                

                                                                                

5   section 51 to the share of taxable income available for                     

                                                                                

6   distribution of each nonresident member after deducting from that           

                                                                                

7   distributive income the same proportion of the total amount of              

                                                                                

8   personal and dependency exemptions of the individual allowed                

                                                                                

9   under this act that the period of time covered by the                       

                                                                                

10  distributive income is of 1 year.  If a flow-through entity is a            

                                                                                

11  nonresident member of a separate flow-through entity in this                

                                                                                

12  state, the flow-through entity in this state of which it is a               

                                                                                

13  member shall withhold the tax as required by this subsection on             

                                                                                

14  behalf of the flow-through entity that is a nonresident member              

                                                                                

15  and all nonresident members of that flow-through entity that is a           

                                                                                

16  nonresident member.                                                         

                                                                                

17      (3) Every casino licensee shall withhold a tax in an amount                 

                                                                                

18  computed by applying the rate prescribed in section 51 to the               

                                                                                

19  winnings reportable by the casino licensee under the internal               

                                                                                

20  revenue code.                                                               

                                                                                

21      (4) Every race meeting licensee or track licensee shall                     

                                                                                

22  withhold a tax in an amount computed by applying the rate                   

                                                                                

23  prescribed in section 51 to a payoff price on a winning ticket              

                                                                                

24  reportable by the race meeting licensee or track licensee under             

                                                                                

25  the internal revenue code that is the result of pari-mutuel                 

                                                                                

26  wagering at a licensed race meeting.                                        

                                                                                

27      (5)  (2)  The taxes withheld under this section shall accrue                


                                                                                

1   to the state on the last day of the month in which the taxes are            

                                                                                

2   withheld but shall be returned and paid to the department by the            

                                                                                

3   employer, flow-through entity, casino licensee, or race meeting             

                                                                                

4   licensee or track licensee within 15 days after the end of any              

                                                                                

5   month or as provided in section 355, except prior to July 1,                

                                                                                

6   1993, taxes deposited pursuant to section 19(2) of  Act No. 122             

                                                                                

7   of the Public Acts of 1941, being section 205.19 of the Michigan            

                                                                                

8   Compiled Laws  1941 PA 122, MCL 205.19, are accrued on the last             

                                                                                

9   day of the filing period.                                                   

                                                                                

10      (6)  (3)  An employer, flow-through entity, casino licensee,                

                                                                                

11  or race meeting licensee or track licensee required by this                 

                                                                                

12  section to deduct and withhold taxes on compensation, a share of            

                                                                                

13  income available for distribution on which withholding is                   

                                                                                

14  required under subsection (2), winning on which withholding is              

                                                                                

15  required under subsection (3), or a payoff price on which                   

                                                                                

16  withholding is required under subsection (4) holds the amount of            

                                                                                

17  tax withheld as a trustee for the state, is liable for the                  

                                                                                

18  payment of the tax to the state, and is not liable to any                   

                                                                                

19  individual for the amount of the payment.                                   

                                                                                

20      (7)  (4)  An employer in this state is not required to deduct               

                                                                                

21  and withhold a tax on the compensation paid to a nonresident                

                                                                                

22  individual employee, who, under section 256, may claim a tax                

                                                                                

23  credit equal to or in excess of the tax estimated to be due for             

                                                                                

24  the tax year or is exempted from liability for the tax imposed by           

                                                                                

25  this act.  In each tax year, the nonresident individual shall               

                                                                                

26  furnish to the employer, on a form approved by the department, a            

                                                                                

27  verified statement of nonresidence.                                         


                                                                                

1       (5) If an employer is a corporation and does not for any                    

                                                                                

2   reason file the returns or pay the tax due under this act, any of           

                                                                                

3   the officers of the corporation having control, supervision of,             

                                                                                

4   or charged with the responsibility for making the returns or                

                                                                                

5   payments shall be personally liable for a failure to file or                

                                                                                

6   pay.  The dissolution of a corporation does not discharge a                 

                                                                                

7   corporate officer's liability for the failure of the corporation            

                                                                                

8   to file a return or remit the tax that was due before                       

                                                                                

9   dissolution.  The sum due for any liability imposed upon a                  

                                                                                

10  corporate officer under this subsection may be assessed and                 

                                                                                

11  collected as provided in sections 23 and 24 of Act No. 122 of the           

                                                                                

12  Public Acts of 1941, being sections 205.23 and 205.24 of the                

                                                                                

13  Michigan Compiled Laws.                                                     

                                                                                

14      (8)  (6)  An employer, flow-through entity, casino licensee,                

                                                                                

15  or race meeting licensee or track licensee required to withhold a           

                                                                                

16  tax under this act, by the fifteenth day of the following month,            

                                                                                

17  shall provide the department with a copy of any exemption                   

                                                                                

18  certificate on which the employee, nonresident member, or person            

                                                                                

19  subject to withholding under subsection (3) or (4) claims more              

                                                                                

20  than 9 personal or dependency exemptions, claims a status that              

                                                                                

21  exempts the employee, nonresident member, or person subject to              

                                                                                

22  withholding under subsection (3) or (4) from withholding under              

                                                                                

23  this section, or elects to pay the tax imposed by this act                  

                                                                                

24  calculated under section 51a.                                               

                                                                                

25      (9)  (7)  An employer shall deduct and withhold the tax                     

                                                                                

26  imposed by this act calculated under section 51a for a resident             

                                                                                

27  who files an exemption certificate under subsection  (6)  (8) to            


                                                                                

1   elect to pay the tax calculated under section 51a.                          

                                                                                

2       (10)  (8)  The exemption certificate required by this section               

                                                                                

3   shall include the following statement, "Electing to file using              

                                                                                

4   the no-form option may not be for everyone who is eligible.  If a           

                                                                                

5   taxpayer chooses the no-form option, he or she may not be                   

                                                                                

6   eligible for some of the credits allowed under this act including           

                                                                                

7   the property tax credit allowed under sections 520 and 522, the             

                                                                                

8   tuition tax credit allowed under section 274, and the city income           

                                                                                

9   tax credit allowed under section 257.".                                     

                                                                                

10      (11) As used in this section:                                               

                                                                                

11      (a) "Casino" means that term as defined in section 110.                     

                                                                                

12      (b) "Casino licensee" means a person licensed to operate a                  

                                                                                

13  casino under the Michigan gaming control and revenue act, the               

                                                                                

14  Initiated Law of 1996, MCL 432.201 to 432.226.                              

                                                                                

15      (c) "Race meeting licensee" and "track licensee" mean a                     

                                                                                

16  person to whom a race meeting license or track license is issued            

                                                                                

17  pursuant to section 8 of the horse racing law of 1995, 1995                 

                                                                                

18  PA 279, MCL 431.308.                                                        

                                                                                

19      Enacting section 1.  This amendatory act takes effect                       

                                                                                

20  October 1, 2003.