The bill amends the Income Tax Act of 1967, specifically section 51, to adjust the income tax rates for individuals other than corporations. The new tax rates are set at 4.35% until October 1, 2012, then reduced to 4.25% until January 1, 2023. A further reduction to 4.05% is established for the year 2023, followed by a return to 4.25% for 2024, and then back to 4.05% starting January 1, 2025. Additionally, if the total general fund revenue exceeds the inflation rate for the preceding fiscal year, the tax rate may be reduced based on a specific calculation. The bill also clarifies the definitions of terms such as "current rate" and "state school aid fund."

Furthermore, the bill mandates that a percentage of gross collections from the income tax be deposited into the state school aid fund, with specific percentages outlined for various fiscal years. It also stipulates that certain funds must be allocated to the agricultural preservation fund and the renew Michigan fund. The language of the bill includes several insertions and deletions to refine the tax structure and clarify the allocation of funds, ensuring that the taxable income for individuals aligns with federal definitions while allowing for specific state adjustments.

Statutes affected:
House Introduced Bill: 206.51
As Passed by the House: 206.51