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Combined Heat and Power Partnership

Nonrefundable Business Activity Tax Credit

dCHPP Glossary (PDF) (2 pp, 53K)

Date Last Updated11/16/2012
Incentive TypeTax
State/FederalMI
Incentive Administrator/Contact OfficeMichigan Economic Development Corporation
Incentive Initiation Date10/17/2002
Incentive Size and Funding SourceBusinesses engaged in alternative energy research, development and manufacturing may claim a nonrefundable credit from the Michigan business tax. The credit is equal to the lesser of (1) the amount by which a business's "tax liability attributable to qualified business activity" for the tax year exceeds the business's "baseline tax liability attributable to qualified business activity," or (2) 10% of the amount by which the business's "adjusted qualified business activity" performed in Michigan, outside of a "Renaissance Zone," for a tax year exceeds such activity for the 2001 tax year. Under either formula, a business may not claim the credit for any tax year in which its "tax liability attributable to qualified business activity" did not exceed the "baseline tax liability attributable to qualified business activity" in 2001.
Eligible RecipientCommercial or industrial Michigan taxpayer with a qualified business activity certified by the Michigan Next Energy Authority. Qualified business activity is defined broadly to include research, development or manufacturing of an alternative energy marine propulsion system, an alternative energy system, an alternative energy vehicle, alternative energy technology or renewable fuel.
Eligible FuelDoes Not Specify
Eligible Project Size (MW)Does Not Specify
Minimum Efficiency Required (%)Does Not Specify
Other Selected Eligibility CriteriaEligible alternative energy technologies include: fuel cells, PV, biomass, solar thermal heating and cooling, wind energy, CHP, microturbines, miniturbines, Stirling engines, electricity storage systems and clean fuel energy systems powered by methane, natural gas, methanol, ethanol or hydrogen.
Other Incentive DetailsNote: Public Act 38 of 2011 repealed the Michigan Business Tax (MBT) and implemented the Corporate Income Tax (CIT). Public Act 39 was passed in conjunction with the CIT and allows for certain credits awarded under the MBT to be retained for the duration of the agreements. Businesses receiving certain credits, including Renaissance Zone credits, may choose to either continue to file under the MBT to continue claiming their credits, or file under the CIT. No additional Renaissance Zone credits will be awarded after 2011.
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