Michigan Senate OKs research tax credit bill



(The Center Square) – The Michigan Senate approved a plan to establish the Research and Development Tax Credit program.

Rep. Greg VanWoerkom serves as the Republican vice chair of the House Tax Policy Committee and supports the plan.

House Bills 4368 and 5099, 5100, 5101, and 5102 were approved on a vote of 22-13.

“The goal is to keep good-paying jobs in Michigan and bring in new, long-standing opportunities in the fields of the future – that’s what this plan will do,” VanWoerkom, a Norton Shores Republican, said in a statement. “Not only will it strengthen our local economy today; it will also help create new jobs in our community for years to come. I’m pleased my Senate counterparts see the value in this plan.”

The bills aim to establish a Research and Development tax credit for eligible taxpayers and employers. Taxpayers and authorized businesses with 250 or more employees could claim up to $2 million per taxpayer or business, respectively, per year.

Taxpayers and authorized businesses with fewer than 250 employers could claim up to $250,000 per taxpayer or business, respectively, per year. Additionally, taxpayers or employers could claim up to $200,000 in additional credit for expenses from collaboration with a research university.

The aggregate amount of R&D credits could be at most $100 million, and if they did, the Department of Treasury would have to prorate the credits as prescribed by the bills. The bills would require the DoT to submit an annual report concerning the effectiveness and operation of the proposed R&D tax credits.

“Economic risk-takers push our state forward; helping us achieve local progress and opportunity. When we support them, we strengthen our communities and all of Michigan,” VanWoerkom said.

If enacted by both chambers and signed into law, the bill would drop revenue from the General Fund and the School Aid Fund by $100 million per tax year.

Most of this revenue loss would be concentrated in the General Fund. In addition, the bills would increase administrative costs to the DoT and the Michigan Strategic Fund.

Gov. Gretchen Whitmer proposed the tax credit in her State of the State speech to keep manufacturing jobs in Michigan.

Sen. Aric Nesbitt, R-Porter Township, opposed the bill.

He described the plan as the Democratic majority placing “big corporations over struggling families – picking winners and losers by handing over millions of Michigan tax dollars to global corporations in secret back-room crony business deals.”

“These tax dollars should be going back into the pockets of the hardworking Michigan taxpayers who actually need economic relief,” Nesbitt said in a statement.

The bill moves to the House.

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