The bill amends the Income Tax Act of 1967, specifically section 51, to adjust the income tax rates for individuals other than corporations. It establishes a tax rate of 4.25% starting October 1, 2012, with a provision for potential reductions based on the percentage increase in total general fund/general purpose revenue compared to the inflation rate. If the revenue increase exceeds the inflation rate, the tax rate must be reduced accordingly. The bill also defines terms such as "capped general fund/general purpose revenue" and "total general fund/general purpose revenue" to clarify the calculations involved in determining tax rate adjustments.

Additionally, the bill mandates that a percentage of the gross collections from the tax be deposited into various funds, including the state school aid fund and the agricultural preservation fund, with specific percentages outlined for different fiscal years. It introduces new requirements for the MiABLE fund, ensuring that a minimum amount is deposited based on maintenance and asset-based fees. The language of the bill also updates certain terms from "shall" to "must," reinforcing the obligations set forth in the legislation. Overall, the bill aims to create a more responsive income tax structure that adjusts based on state revenue and inflation trends.

Statutes affected:
Senate Introduced Bill: 206.51