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SB 557

Corporate income tax: credits; research and development credit for certain businesses located in an aerospace defense zone; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 279 & 679.

2025-2026 Regular Session Introduced by Mark Huizenga and 3 co-sponsors

Michigan bill creates R&D tax credits for aerospace defense businesses in designated zones to attract innovation investment and high-value manufacturing jobs.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
#aeronautics:other #corporateincometax:credits #individualincometax:credit
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Bill Summary · SB 557

Legislative bill overview

SB 557 proposes to amend Michigan's corporate income tax code by adding tax credits specifically for research and development (R&D) activities conducted by businesses located in designated aerospace defense zones. The bill creates two new sections (279 and 679) within the Michigan Tax Code to establish and define these targeted tax incentives.

Why is this important

Aerospace and defense industries are significant economic drivers in Michigan, and R&D tax credits can influence where companies invest in innovation and facilities. This targeted approach aims to attract or retain high-value manufacturing and technology jobs in specific geographic zones, but the fiscal impact on state tax revenue depends on how broadly the credits are drawn and which businesses qualify.

Potential points of contention

  • Cost to state budget: The revenue loss from these credits is unspecified in the bill summary; critics may argue about whether the economic growth justifies the foregone tax revenue, while supporters claim it attracts jobs that generate broader tax benefits
  • Geographic fairness: Creating zone-specific incentives raises questions about why other regions or industries don't receive similar treatment, potentially creating competitive disadvantages outside designated aerospace defense areas
  • Definition and scope: The bill's effectiveness hinges on how "aerospace defense zone," qualifying R&D activities, and eligible businesses are defined—overly broad definitions could benefit non-aerospace companies, while narrow definitions might miss intended beneficiaries

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

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