Business Incentives > MEGA

Michigan Economic Growth Authority (MEGA)
MEGA was created in 1995 to promote high quality economic growth and job creation. Since its inception, MEGA Tax Credits have generated billions in private investment and created in excess of 120,000 jobs.

Each MEGA program has statutory requirements that must be met on all MEGA Tax Credit projects. Credits may be awarded for up to 20 years and for up to 100% depending on various factors such as job creation, capital investment and other MEGA Board considerations. The credit is based on an amount equal to the Box 1 W-2 wages multiplied by the personal income tax rate in effect on the first day of the company tax year. A recent statutory change also allows companies to take the credit against the employer-paid health care benefits multiplied by the personal income tax rate.

MEGA STANDARD AND RURAL JOB CREATION TAX CREDITS
MEGA is the state's response to interstate competition for company expansions and relocations providing a refundable tax credit against the Michigan Business Tax (MBT). Companies eligible for a MEGA Employment Tax Credit engage in manufacturing, mining, research and development, wholesale and trade, film and digital media, office operations, or certain tourism projects.

Standard MEGA Tax Credits are available to companies creating at least 50 new jobs by the first year of the credit, as determined by the MEGA. The new jobs must be in addition to those existing during the year preceding application for the credit (termed 'base jobs') and previously existing 'base' jobs must be maintained for the life of the credit.

Rural MEGA Tax Credits are available to companies in counties with populations less than 90,000. The job creation requirement for a Rural MEGA is five new jobs by the first year of the credit and 25 new jobs by the fifth year of the credit, as determined by MEGA, along with the maintenance of the base employment level.

MEGA HIGH-TECH AND HIGH-WAGE JOB CREATION TAX CREDITS
The objectives of the High-Tech MEGA program are to promote the development of high-tech businesses in both traditional and emerging industries by providing a tax credit against the Michigan Business Tax (MBT) and assist in the diversification of Michigan's economy. High-Tech MEGA Employment Tax Credits require that companies meet the definition of a “high-technology company” as defined under the Act and as determined by the Michigan Economic Development Corporation (MEDC).

Five new jobs must be created by the time the company collects the credit for the first year as determined by the MEGA, and 25 jobs must be created by the fifth year, along with the maintenance of the base employment level. The statute now allows a qualified high-technology business to collect 200% of the sum of the payroll and health care benefits for the first three years of the credit, multiplied by the personal income tax rate on qualified new jobs. Businesses that receive the 200% credit under this accelerated scenario are limited to a maximum seven-year credit.

High-Wage MEGA Tax Credits are available to businesses that create jobs paying a minimum of 300% of the Federal Minimum Wage to each and every employee for which the business will receive a tax credit. The company must pay an average of 300% of the Federal Minimum Wage for all its employees. Job creation objectives are identical to the High-Tech MEGA Tax Credit program.

High Tech/High Wage tax credits are designed to attract innovative and cutting-edge companies that specialize in new technologies. They are available to firms doing advanced computing, biotechnology, electronic device technology, engineering and laboratory testing related to product development, medical device technology, product research and development, advanced vehicle technology or technology that assists in the assessment or prevention of threats or damage to human health or the environment.

MEGA RETENTION TAX CREDITS
The MEGA is empowered to assist Michigan companies that are considering a business closure by awarding a Retention MEGA Tax Credit. Companies eligible for a Retention MEGA Tax Credit against the Michigan Business Tax (MBT) are those engaged in manufacturing, mining, research and development, wholesale and trade, film and digital media, office operations and certain tourism projects.

In order to qualify for a Retention MEGA Tax Credit, companies must agree to meet certain minimum requirements. Depending on the overall investment, each credit may be awarded for up to 20 years and up to 100% of the wages and employer-paid health care benefits multiplied by the personal income tax rate in effect at the beginning of the company tax year. The amount of the credit is based on the amount of the investment per job and utilizes a formula specific to the MBT Act.