This bill amends the Income Tax Act of 1967 by modifying sections 623 and 695, which pertain to corporate income tax rates and the distribution of tax revenue. The corporate income tax will be set at a rate of 6.0% until January 1, 2025, after which it will increase to 8.5%. The bill also clarifies the corporate income tax base and includes various adjustments related to business income, such as the treatment of interest income, dividends, and expenses related to intangible assets. Additionally, it specifies that taxpayers can carry forward business losses incurred after December 31, 2011, to offset future tax liabilities.

In terms of revenue distribution, the bill mandates that all revenue collected under this part must be deposited into the general fund. It outlines specific allocations for the 2022-2023 to 2024-2025 state fiscal years, including up to $1.2 billion to the general fund and additional amounts to various funds such as the Michigan housing and community development fund and the strategic outreach and attraction reserve fund. Starting in the 2025-2026 fiscal year, the bill stipulates that $50 million must be allocated to the Michigan housing and community development fund, along with provisions for additional revenue increases to the state school aid fund.

Statutes affected:
House Introduced Bill: 206.623, 206.695