This bill amends the Income Tax Act of 1967, specifically section 51, to adjust the income tax rates for individuals other than corporations. The bill establishes a tax rate of 4.05% for the period from January 1, 2023, to January 1, 2024, and then sets the rate at 4.25% from January 1, 2024, to January 1, 2025. Following that, the tax rate will revert to 4.05% starting January 1, 2025, unless certain conditions regarding revenue growth and inflation are met, which could trigger further reductions in the tax rate. The bill also clarifies the definitions of terms such as "current rate" and "state school aid fund," and mandates that a percentage of gross collections from the tax be deposited into the state school aid fund and the agricultural preservation fund.

Additionally, the bill modifies existing language to ensure that the tax rates and revenue distributions are clearly defined and updated. It specifies that the taxable income of nonresidents must be computed similarly to that of residents, and it allows for credits against taxes due for certain trust distributions. The bill aims to create a more structured approach to income tax rates and their adjustments based on economic conditions, while also ensuring that funds are allocated appropriately to support education and agricultural preservation in Michigan.

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