The state legislature is working on a series of bills that would revamp current Michigan Economic Growth Authority tax credits to help keep businesses in the state. The credits, which include Mega Credits, are 13-years-old and arguably outdated.
According to excerpts from the article:
The timing is opportune, as the impact of Michigan's new business-tax structure continues to unfold and one neighboring state has stepped up its efforts to woo Michigan business.
Senate Bill 1189, sponsored by Hansen Clarke, D-Detroit,would make more businesses eligible for MEGA incentives, including eliminating the Michigan vs. non-Michigan comparison that companies now must make.
Mark Morante, director of policy and legislative affairs at the Michigan Economic Development Corp., said the requirement can effectively force companies to look elsewhere to seek competitive offers, and “that's not necessarily always a good thing.”
Instead, companies must show why the project is necessary and what the credit will do to advance the project, and the MEGA program will evaluate that when deciding the size and length of tax credit, Morante said.
The bill reduces from 100 to 50 the minimum number of new jobs a business must create or retain to qualify for a MEGA tax credit.
The bill also provides for MEGA tax credits targeting historic buildings in downtowns. And the measure changes the state's credit limits, from annually granting up to 25 new tax credits of up to 20 years each under the general MEGA program to instead allow the state to annually sign agreements totaling up to 400 credit years.
Clarke's bill also expands the state's use of a“clawback” provision in MEGA agreements, and requires a business to repay tax credits if it moves jobs outside Michigan during the agreement and for a period of years after the agreement ends, as determined by the MEGA board.
Read the entire article here.
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