Public Act 240 of 2009 (PA 240-09)

PA 240-09, effective January 8, 2010, amends Section 434 [MCL 208.1434] of the Michigan Business tax Act (MBTA) to allow the Michigan Economic Growth Authority (MEGA) to enter into a maximum of five (previously four) Michigan Business Tax credit agreements for the construction of an integrative cell (battery) manufacturing facility and extends the deadline from October 1, 2009 to March 31, 2010 for MEGA to enter into such agreements. PA 240-09 allows MEGA, until March 1, 2010, to enter into Michigan Business Tax credit agreements for the manufacture of advanced lithium ion battery packs in Michigan for tax years beginning on or after January 1, 2010 end ending before January 1, 2017.

The law specifies that the taxpayer must make capital investments in Michigan of at least $250 million, create at least 1,000 new jobs and manufacture at least 225,000 advanced lithium ion battery packs in Michigan. The maximum credit cannot exceed $26 million per tax year for no more than three tax years. If a taxpayer makes capital investments of at least $200 million and create at least 300 new jobs, the total credit is not more than $42 million over four consecutive tax years.

If a taxpayer claims the first credit above, then the second credit above cannot also be claimed.  Capital investments, new jobs, and other expenses cannot be double-counted for this credit and for other credits against the MBT.  Applicable to tax years beginning after 2014 and ending before 2017, a taxpayer may claim a credit for 75% of the costs incurred to implement a sourcing program to use battery cells from a business that has agreed to construct an integrative cell manufacturing facility.  A single taxpayer cannot claim a credit of more than $12.5 million per year for more than two years. A taxpayer must manufacture at least 10,000 motor vehicles in each year a credit is claimed at a Michigan facility.  Also, some of the costs eligible for the credit must be incurred at the facility where the motor vehicles are manufactured.  The law require agreements for various battery-related tax credits to include a repayment provision.

Public Act 241 of 2009 (PA 241-09)

PA 241-09, effective 01/08/2010, amends the Michigan Business Tax brownfield credit to provide that a qualified taxpayer that has a preapproval letter issued after December 31, 2007 and before January 1, 2014 (previously, January 1, 2013) may claim a brownfield credit. 

PA 241-09 provides that for a project approved or amended on and after January 1, 2010, if the total of all eligible investments for a project exceed $10 million but less than $100 million, (previously $300 million), the taxpayer may claim a credit of:

(1) up to 12.5% of the costs of the qualified taxpayer's eligible investment on an eligible property that is located in a qualified local governmental unit; or

(2) up to 15% of the cost (up to 20% until December 31, 2010) of the qualified taxpayer's eligible investments on an eligible property if the project is designated as an urban development area project.

The law also amends the maximum number of projects the Michigan Economic Growth Authority may approve.  PA 241-09 also replaces references to the Department of Environmental Quality with references to the Department of Natural Resources.