MI HB6109

Qualifies qualified start-up businesses with no business income for 2 consecutive tax years to claim a tax credit for 2008, 2009, and 2010 tax years, equal to their tax liability for the year with no income.

Limits tax credit claims to a maximum of 3 total tax years (reduced from 5 years for businesses that previously claimed credits under former 1975 PA 228).

Requires businesses claiming the credit to have fewer than 25 full-time employees, sales under $1,000,000, research and development expenses of at least 15% of total expenses, and be non-publicly traded.

Imposes recapture provisions requiring businesses to repay credits (100% if no Michigan activity in year 1, 67% in year 2, 33% in year 3 following credit claim) if they have no Michigan business activity but maintain business activity outside the state.

Caps compensation, directors' fees, and distributive shares paid to owners and officers at $135,000 annually for tax years in which the credit is claimed.