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 4.05% for the period from January 1, 2023, to January 1, 2024, and will increase to 4.25% from January 1, 2024, to January 1, 2025. Starting January 1, 2025, the tax rate will be reduced to 3.9%. The bill also removes previous provisions that allowed for tax rate adjustments based on the percentage increase in general fund revenue compared to inflation rates.

Additionally, the bill mandates that certain percentages of gross tax collections be deposited into the state school aid fund, with specific rates defined for different fiscal years. The language throughout the section has been updated to replace "shall" with "must" to emphasize the requirement for these deposits. Other changes include clarifications on how taxable income is computed for nonresidents and residents, as well as adjustments to credits for beneficiaries of trusts. Overall, the bill aims to streamline tax rates and ensure consistent funding for education through the state school aid fund.

Statutes affected:
Senate Introduced Bill: 206.51