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HB 5978

Corporate income tax: credits; aerospace and defense technology related research and development credit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 277 & 677.

2023-2024 Regular Session

Michigan establishes a corporate income tax credit for aerospace and defense R&D spending to incentivize advanced technology development in those sectors.

bill electronically reproduced 09/26/2024
#aeronautics:other #corporateincometax:credits #individualincometax:credit
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Bill Summary · HB 5978

Legislative bill overview

HB 5978 creates a new corporate income tax credit in Michigan for businesses conducting aerospace and defense technology research and development activities. The bill amends the Michigan corporate tax code by adding two new sections to provide this incentive mechanism for qualifying R&D spending in these sectors.

Why is this important

Aerospace and defense are significant manufacturing sectors in Michigan's economy, particularly in regions like southeast Michigan. Tax credits for R&D can influence corporate decisions about where to locate research facilities and may affect state competitiveness for attracting or retaining advanced technology companies in these industries.

Potential points of contention

  • Revenue impact: The fiscal cost of this tax credit to the state budget is not specified in the bill summary, raising questions about whether the state can afford this incentive or what other programs might be affected
  • Industry selectivity: Providing credits specifically to aerospace/defense but not other technology or manufacturing sectors raises fairness questions about why these industries receive preferential treatment
  • Definition and verification: The bill doesn't clarify what qualifies as "aerospace and defense technology R&D," which could create ambiguity in administration or allow strategic interpretation by taxpayers

Compiled from official sources — confirm details with the bill’s official record.

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