This bill amends the Income Tax Act of 1967, specifically section 51, to adjust the income tax rates and the distribution of tax revenues. It establishes a new tax rate of 4.25% for individuals starting October 1, 2012, with a provision for potential reductions based on the growth of general fund revenue compared to inflation. The bill also introduces a mechanism for determining the "capped general fund/general purpose revenue" and mandates that the state treasurer and fiscal agency directors assess revenue growth annually. Additionally, it specifies that certain percentages of tax revenue must be allocated to the state school aid fund and the agricultural preservation fund, with new requirements for the MiABLE fund starting October 1, 2025.

The bill includes several insertions and deletions to clarify the language regarding tax rates and revenue distributions. Notably, it changes the language from "shall" to "must" in various sections to emphasize the mandatory nature of the provisions. It also introduces definitions for terms such as "asset-based fees" and "maintenance fees" related to the MiABLE fund. Furthermore, the bill stipulates that the taxable income of nonresidents must be computed similarly to that of residents, and it clarifies the treatment of income from trusts for tax purposes. The enactment of this bill is contingent upon the passage of Senate Bill No. 556.

Statutes affected:
Senate Introduced Bill: 206.51