Individual income tax: credit; credit for the sale of mobile home park or seasonal mobile home to residents or resident's association or cooperative; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 281 & 678. TIE BAR WITH: SB 0937'26

2025-2026 Regular Session Introduced by Rosemary Bayer and 10 co-sponsors

SB 938 offers a 15% nonrefundable income tax credit to park owners who sell a mobile home park to residents or resident groups, effective 2026.

referred to Committee on Government Operations

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Purpose and intent

SB 938 proposes to create new income tax credits for qualified taxpayers who sell a mobile home park or seasonal mobile home park to residents or resident associations/cooperatives. The credits aim to encourage the sale of such parks to resident ownership, aligning with policies that promote resident control and affordability. The bill ties its enactment to SB 937, meaning it only takes effect if SB 937 becomes law.

Key provisions

Tax years covered: Begin on or after January 1, 2026.

Credit for sale to residents/associations/cooperatives:

A “qualified taxpayer” who sells a mobile home park or seasonal mobile home park to a resident, a resident’s association, or a cooperative after providing the required notice under section 30m of the Mobile Home Commission Act (1987) may claim a credit equal to 15% of the purchase price.
The seller must file the credit with their annual income tax return and attach:
A copy of the required notice under MCL 125.2330m.
A copy of the settlement statement for the purchase.

Treatment for flow-through entities:

Members of a flow-through entity that qualifies for the credit may claim the credit against their individual tax liability based on the member’s distributive share of the entity’s income, or via another department-approved method.

Credit limits and refunds:

If the credit exceeds the taxpayer’s liability for the year, the excess is not refundable.

Definitions:

“Mobile home park” and “seasonal mobile home park” follow the definitions in the Mobile Home Commission Act.
“Qualified taxpayer” is the owner of the park licensed under the Mobile Home Commission Act.

Enacting condition: The credit provisions in Sec. 281 and Sec. 678 depend on SB 937 becoming law.

Who is affected

Qualified park owners: Owners licensed under the Mobile Home Commission Act who sell to residents or resident associations/cooperatives.

Residents and resident organizations: Buyers (residents, associations, or cooperatives) of parks who would benefit indirectly through maintaining resident ownership.

Members of flow-through entities: Investors or owners who report income via partnerships/S corps that qualify for the credit can claim a share of the credit.

Taxpayers with limited refundable capacity: The credit is non-refundable, so it can reduce tax liability to zero but not create a refund.

Procedural and timeline aspects

Effective date: January 1, 2026, for tax years beginning on or after that date.

Notice requirement: The sale must follow the notice process under section 30m of the Mobile Home Commission Act.

Administrative details: Requires documentation (notice and settlement statement) to be submitted with the annual tax return claiming the credit.

Legislative dependency: Enactment of SB 937 is a prerequisite for SB 938 to take effect.

Practical impact

Encourages transfer of park ownership to residents/associations/cooperatives by offering a 15% tax credit on the sale price.

Provides a mechanism for flow-through entities to participate in the credit through distributive shares.

Creates a potential reduction in tax liability (non-refundable) for qualifying sales, potentially improving the financial attractiveness of resident-owned parks.

Bill