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SB 132

Individual income tax: credit; credit for donations to endowment fund of community foundations; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding sec. 261.

2025-2026 Regular Session Introduced by Sam Singh

Michigan creates state income tax credit for donations to community foundation endowments, reducing state revenue to incentivize charitable giving.

referred to Committee on Economic Competitiveness
#businesses:charitableorganizations #individualincometax:credit
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Bill Summary · SB 132

Legislative bill overview

SB 132 creates a Michigan state income tax credit for individuals who donate to endowment funds of community foundations. The bill amends the Michigan Income Tax Act to establish a new tax incentive mechanism designed to encourage charitable giving to these foundational organizations.

Why is this important

Community foundations distribute grants to local nonprofits, schools, and public services, making them significant drivers of charitable work at the regional level. By offering a tax credit, the state aims to increase donations to these foundations, potentially expanding their capacity to fund community projects without direct state spending.

Potential points of contention

  • Tax revenue impact: The state foregoes income tax revenue equal to the credits claimed; fiscal analysis of the cost-benefit ratio compared to direct state funding is critical
  • Equity concerns: Tax credits primarily benefit higher-income donors who can afford charitable giving and have sufficient tax liability to claim credits, potentially concentrating philanthropic influence
  • Credit structure details: The bill's specific credit percentage, cap limits, and eligibility requirements (not fully detailed in this summary) will determine whether incentives are proportionate and whether certain foundations receive preferential treatment

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

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