Legislation Resets Job Creation Requirements and Provides For A Clawback of the Credit
Public Act 292 of 2011 (S.B. 855), effective January 1, 2012 amends the Michigan Business Tax (MBT) credits for the construction of a large-scale battery facility and for the construction of a cell manufacturing facility.
Construction of Large-Scale Battery Facility Credit
The (MBT) credit is available for the capital investment expense for the construction of a facility that will produce at least one or more of batteries, battery components, storage systems, battery thermal and management components or systems, AC or DC power supplies, power electronics, battery formation and test equipment or energy conversion devices including components related to such products of various sizes and capacities. Previously, the credit was for a facility that would produce large-scale batteries and manufacture integrated power management, smart control and storage systems from 500 kilowatts to 100 megawatts. In addition, the taxpayer must create at least 750 new jobs (previously, 500 jobs) in Michigan. The requirement that the taxpayer receive financing from conventional financing, recovery zone facility bonds or a federal loan guarantee is removed. The credit is capped at $50 million over four years (previously, $25 million per year for four years). The Michigan Economic Growth Authority (MEGA) is required to provide in the agreement that the credit is reduced by $65,000 for each job less than 750 that was not created and an additional clawback if the taxpayer fails to create at least 500 jobs. Finally, MEGA must adopt a resolution to authorize an agreement by June 30, 2012 (previously, March 1, 2010).
Construction of Cell Manufacturing Facility Credit
A taxpayer that is a member of a unitary business group claiming the construction of cell manufacturing facility credit is not required to file a combined return. If a separate return is filed, the taxpayer must create an additional 100 new jobs for a total of 400 jobs in Michigan; otherwise, the taxpayer must create 300 jobs. The credit is capped at $25 million per year for three years (previously, four years). The taxpayer may not then claim a credit for MEGA employment or plug-in traction battery packs. The voucher certificate for this credit may be refundable.