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HB 6020

Individual income tax: credit; community investment tax credit; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 279 & 679.

2023-2024 Regular Session Introduced by Erin Byrnes and 11 co-sponsors

Michigan bill creates state income tax credit for individual taxpayers making qualifying community investments to incentivize private capital deployment in underserved areas.

bill electronically reproduced 10/15/2024
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Bill Summary · HB 6020

Legislative bill overview

HB 6020 proposes creating a community investment tax credit within Michigan's income tax code by adding new sections to the 1967 Michigan Tax Code. The bill would allow individual taxpayers to claim a credit against their state income taxes for qualifying investments or contributions to community development initiatives. The specific parameters of the credit—such as eligible investments, credit amounts, and income limitations—are not detailed in the bill introduction summary provided.

Why is this important

Tax credits like this can incentivize private capital flow into underserved communities by providing direct financial benefits to investors, potentially addressing economic development gaps in specific geographic areas or sectors. However, the actual effectiveness depends entirely on how the credit is structured, administered, and monitored to prevent misuse or excessive revenue loss to the state.

Potential points of contention

  • Revenue impact: The state must balance incentivizing community investment against foregone tax revenue; poorly designed credits can become expensive fiscal commitments with limited measurable returns
  • Equity and targeting: Questions about whether the credit benefits primarily wealthy investors (who benefit most from tax credits) versus genuinely helping economically disadvantaged communities
  • Definition and administration: How "community investment" is defined, verified, and audited will be critical; vague language could enable abuse or allow investments that don't meaningfully serve intended communities

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

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