WeVote
Log In

Bill

Bill

SB 968

Insurance: other; state low-income housing tax credit; create. Amends secs. 476a & 476b of 1956 PA 218 (MCL 500.476a & 500.476b). TIE BAR WITH: SB 0966'26, SB 0967'26

2025-2026 Regular Session Introduced by Jeff Irwin

Insurers may claim a tax credit against Michigan insurance taxes equal to the state low-income housing tax credit they would claim under the income tax act, starting 2027, if SB 96

referred to Committee on Regulatory Reform
#corporateincometax:credits #housing:housingdevelopmentauthority #insurance:other
0
WeVote Research Nonpartisan
Bill Summary · SB 968

Summary of SB 968 (2025-2026) – Michigan

Purpose and intent

  • SB 968 amends the Insurance Code of 1956 (196 PA 218), specifically sections 476a and 476b, to:
    • Establish a tie-in with state-level low-income housing credits.
    • Allow insurers to claim a credit against insurance-related taxes for the value of the state low-income housing tax credit (SLIHTC) they would be eligible for under the Michigan income tax act, beginning in tax years that start on or after January 1, 2027.
  • The measure is enacted only if Senate Bills 966 and 967 are also enacted (tied or contingent legislation).

Key provisions and changes

  • Section 476a (tax credit for nonresident/alien insurers)
    • Beginning in tax years starting January 1, 2027, insurers paying the tax under this section may claim a credit equal to the amount of the state low-income housing tax credit they would be eligible to claim as a “qualified taxpayer” under section 679 of the Michigan income tax act (1967 PA 281, MCL 206.679).
    • The credit mirrors the value of the state low-income housing credit that would be claimed for a qualifying taxpayer under the income tax act.
  • Section 476a (existing mechanisms and deposits)
    • Retains the existing framework requiring certain foreign/alien insurers to make deposits of securities or payments equivalent to what would be required in other jurisdictions, as a condition of transacting business in Michigan. References to deposits, taxes, fines, etc., stay part of the existing deterrence framework intended to balance interstate insurance taxation.
    • Provides for administration and potential revocation of authority if the required payments are not made.
  • Section 476b
    • States that authorized insurers are subject to the tax provided in section 476a if applicable, or to the Former Single Business Tax Act or Michigan Business Tax Act or the income tax act provisions—whichever is greater.
  • Enacting section
    • The act’s effective date is contingent on passage of SB 966 and SB 967, in addition to SB 968.

Who and what is affected

  • Insurers licensed and operating in Michigan, including alien or foreign insurers with deposits/taxes under the current framework.
  • The provision primarily impacts the tax treatment and potential credits for insurers under the Michigan insurance code, aligning with incentives tied to the state’s affordable housing effort.
  • Qualified taxpayers under the Michigan income tax act (section 679) for the purpose of the low-income housing tax credit will determine the credit amount insurers may claim against their insurance taxes.

Procedural and timeline aspects

  • Effective date tied to the enactment of three bills: SB 968, SB 966, and SB 967.
  • If all three bills are enacted, the new credit against insurance tax for 2027 and later tax years would apply as described.
  • The bill includes administrative provisions for tax collection and disclosure and references to preexisting tax administration statutes (e.g., 1941 PA 122, as amended).

Background context

  • The bill’s accompanying materials indicate support for leveraging the state’s low-income housing tax credit program (MSHDA-related) to provide tax relief to insurers that invest in Michigan’s affordable housing through SLIHTC.
  • MSHDA (Michigan State Housing Development Authority) administers affordable housing programs and issues financing through bonds; the connection here ties insurer tax credits to housing credit outcomes.

Financial and policy impact (key points)

  • Potential reduction in net insurance tax revenue to the state (offset by the expansion of SLIHTC utilization by insurers).
  • Encourages insurers to participate in or support affordable housing by aligning tax incentives with the state housing credit program.
  • Creates a structural link between capital deployment in housing credits and insurance tax liabilities, subject to the contingent enactment of related bills.

If you’d like, I can also provide a side-by-side comparison with current law, or a brief outline of SB 966 and SB 967 to illustrate how this tie-bar package would operate when enacted.

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

Sign in to ask a question.