This bill amends the Income Tax Act of 1967 by modifying Section 51 and adding new sections 51a and 695a. The amendments to Section 51 include changes to the tax rates imposed on individuals, with a specific focus on adjusting the tax rate based on the percentage increase in general fund revenue compared to inflation. The bill specifies that if the revenue increase exceeds the inflation rate, the tax rate must be reduced accordingly. Additionally, the bill introduces new provisions for the distribution of tax revenue, including allocations to the state school aid fund, agricultural preservation fund, renew Michigan fund, and other designated funds.

Furthermore, the bill repeals several existing sections of the Income Tax Act, specifically sections 51d to 51f, 51h, 476, and 695, which may streamline the tax code and eliminate outdated provisions. The new Section 51a outlines specific percentages of tax revenue that must be allocated to various funds starting from October 1, 2025, while Section 695a mandates that the revenue collected under this part must be distributed to the general fund. Overall, the bill aims to adjust tax rates and improve the allocation of tax revenues to support various state initiatives.

Statutes affected:
Senate Introduced Bill: 206.51