MI SB0557

Creates a 30% tax credit for qualified aerospace and defense businesses on research and development expenses exceeding their 3-year base amount, capped at $10,000,000 per taxpayer per year, for tax years 2026-2029

Establishes a 20% tax credit for inventory storage and maintenance expenses for smaller aerospace defense businesses with under $5,000,000 in annual gross revenue, capped at $1,000,000 per taxpayer per year

Limits total annual tax credits to $100,000,000 for R&D credits and $25,000,000 for inventory credits across all qualified taxpayers

Requires businesses to be located in, relocating to, or expanding within a designated aerospace defense zone and receive certification from the Michigan Strategic Fund

Credits exceeding tax liability may be refunded or carried forward for up to 5 years; an annual report on program effectiveness must be submitted to the legislature by July 1 each year