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Lead Contact for
Tax Policy

Mike Johnston

Vice President of Government Affairs

517-853-3354 (fax)

Government Affairs > Hot Issues > Tax Policy
Tax Policy

State Income Tax Elimination Bills Introduced in House and Senate

New legislation to cut Michigan’s current 4.25 percent income tax rate and eventually eliminate it altogether has been introduced in both chambers of the Legislature.

Senate Bill 4 (Senator Jack Brandenburg, R-Harrison Twp.) and House Bill 4001 (Representative Lee Chatfield, R-Levering), would both reduce the state’s current 4.25 percent rate to 3.9 in 2018 and initiate a phase-out of the tax by reducing the rate 0.1 each year until the rate is zero.

The Senate version is a five-year plan which would reduce the rate to 4 percent in the first year and reduce it an additional 1 percent over the next four years.

“It always helps the state economically when you leave more money in peoples’ pockets rather than taking it through taxes. People are spenders, not savers,” said Brandenburg. “If you give them money to spend, they will spend it. That means businesses can be expanded and business expansion spells jobs.”

The MMA Tax Policy Committee has not yet reviewed these legislation and so has not taken a position on the bills.

Call MMA’s Mike Johnston, at 517-487-8554 or johnston@mimfg.org, with any questions or for more details.

MMA Defeats City Income Tax Legislation

MMA, working with the broader business community, defeated proposed legislation which would have made your business be liable for your employees’ city income tax debt and mandated you to be both employer and tax collector.

Senate Bill 1127, introduced by Senator Goeff Hansen (R-Hart), passed the Senate Government Operations Committee in October over MMA’s objections but died on the floor of the Senate following vigorous efforts to oppose the far-reaching legislation.

Under current law, employers located in a city with a tax have an obligation to withhold and remit the tax on behalf of their employees. However, this legislation would have expanded that requirement to employers who have no connection to a city other than to hire employees who reside in that city. Not only would this create a tremendous amount of complexity for payroll withholding, it would shift the ultimate liability for paying the tax to the employer.

“This legislation would impose an administrative nightmare on any employer who employs workers who live in cities with a city income tax,” said Delaney McKinley, MMA director of human resource policy and membership development. “What’s most concerning is that the job provider would be liable for the tax debt as well as penalties and interest and enforcement actions and audits.”

The Legislature adjourned for the year on 12/15/16 without passing the bill. We expect the issue to arise again in the 2017-2018 Legislative Session.

Contact Delaney McKinley, at 517-487-8530 or mckinley@mimfg.org, for more information.

MMA Blocks Uncompetitive Dark Stores Legislation

MMA successfully blocked legislation which would have amended property valuation methods in Michigan and carried serious ramifications on the valuation of your property and your ability to compete. MMA worked with Senate leadership following the bill’s passage in the House to articulate its opposition to the limitation on taxpayers’ ability to appeal their property taxes and successfully kept the bill from receiving a vote.

“MMA is pleased that the Senate decided against moving legislation that would limit business taxpayers’ ability to appeal their property taxes under the General Property Tax Act,” said Mike Johnston, MMA vice president of government affairs. “This bill would have drastically undercut the ability of manufacturers and other property owners to appeal property taxation — a basic right under the constitution. Maintaining the status quo means Michigan manufacturers can better compete with businesses in other states and around the world.”

Call MMA’s Mike Johnston, at 517-487-8554 or johnston@mimfg.org, with any questions or for more details.


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