Lawmakers Hear Treasury, Critics on MEGA Credits, Tax Liability and Disclosure

LANSING — Officials from the Michigan Department of Treasury told the House Oversight Subcommittee on corporate subsidies and state investments on May 20 that MEGA (Michigan Economic Growth Authority) tax credits remain sizable on the state’s books and are administered using certificates issued by the Michigan Economic Development Corporation, while a policy analyst from the Mackinac Center for Public Policy called for greater transparency and a reevaluation of the program’s fiscal effects.

At the hearing, Amanda West, deputy treasurer for advocacy, policy and analysis, and Chief Deputy Treasurer Jeff Guilfoyle outlined the history of Michigan’s business taxes and summarized how legacy MEGA credits interact with the state’s current corporate income tax (CIT). “Taxpayers with certificated credits like MEGA continue to file under the MBT until their credits end,” Guilfoyle said, describing the filing rule that requires taxpayers to compute liability under the old Michigan Business Tax (MBT) and the CIT and to pay the greater of the two before refundable credits are applied.

The distinction matters because MEGA credits are refundable: when a certificated credit exceeds a taxpayer’s liability, the excess is paid as a refund. Guilfoyle said Treasury’s most recent compilation, drawn from Michigan Economic Development Corporation (MEDC) reports, shows roughly $3 billion…