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, 4.25% from January 1, 2024, to January 1, 2025, and 3.9% starting January 1, 2025. The previous provisions that allowed for a reduction in the tax rate based on the percentage increase in general fund revenue compared to inflation have been deleted.

Additionally, the bill modifies the language regarding the distribution of tax revenue to various funds. It specifies that certain percentages of gross collections from the income tax must be deposited into the state school aid fund and the agricultural preservation fund, replacing the previous language that used "shall" with "must" to emphasize the requirement. The bill also clarifies the computation of taxable income for residents and nonresidents, ensuring consistency with federal tax definitions and requirements.

Statutes affected:
Senate Introduced Bill: 206.51