INCOME TAX CHECKOFFS FOR CITIES
House Bill 4120
Sponsor: Rep. Joan Bauer
Committee: Tax Policy
Complete to 2-5-07
A SUMMARY OF HOUSE BILL 4120 AS INTRODUCED 1-24-07
The bill would amend the City Income Tax Act to permit cities that impose an income tax to amend their income tax ordinances to create a tax checkoff. The checkoff would permit taxpayers to contribute a specified amount (deducted from any refund or added to any liability) to a restricted fund within the General Fund of the city. The purpose of the fund would have to be specified in the ordinance creating the checkoff and clearly printed on the annual income tax return or the accompanying instruction book.
MCL141.510
FISCAL IMPACT:
The bill would have no fiscal impact on the state or on local units of government.
BACKGROUND INFORMATION:
The City Income Tax Act permits cities to levy an excise tax on income following adoption of an ordinance incorporating Chapter 2 of the act (MCL 141.601 to MCL 141.699). Voter approval is required for taxes first imposed after January 1, 1995. The table below shows the cities that impose an income tax, along with the year adopted, and tax rates.
|
Tax Rate |
||||
|
City |
Year Adopted |
Resident |
Corporation |
Non-Resident |
|
Albion |
1972 |
1.0% |
1.0% |
0.5% |
|
Battle Creek |
1967 |
1.0% |
1.0% |
0.5% |
|
Big Rapids |
1970 |
1.0% |
1.0% |
0.5% |
|
Detroit |
1962 |
2.5% |
1.0% |
1.25% |
|
Flint |
1965 |
1.0% |
1.0% |
0.5% |
|
Grand Rapids |
1967 |
1.3% |
1.3% |
0.65% |
|
Grayling |
1972 |
1.0% |
1.0% |
0.5% |
|
Hamtramck |
1962 |
1.0% |
1.0% |
0.5% |
|
Highland Park |
1966 |
2.0% |
2.0% |
1.0% |
|
Hudson |
1971 |
1.0% |
1.0% |
0.5% |
|
Ionia |
1994 |
1.0% |
1.0% |
0.5% |
|
Jackson |
1970 |
1.0% |
1.0% |
0.5% |
|
Lansing |
1968 |
1.0% |
1.0% |
0.5% |
|
Lapeer |
1967 |
1.0% |
1.0% |
0.5% |
|
Muskegon |
1993 |
1.0% |
1.0% |
0.5% |
|
MuskegonHeights |
1990 |
1.0% |
1.0% |
0.5% |
|
Pontiac |
1968 |
1.0% |
1.0% |
0.5% |
|
Port Huron |
1969 |
1.0% |
1.0% |
0.5% |
|
Portland |
1969 |
1.0% |
1.0% |
0.5% |
|
Saginaw |
1965 |
1.5% |
1.5% |
0.8% |
|
Springfield |
1989 |
1.0% |
1.0% |
0.5% |
|
Walker |
1988 |
1.0% |
1.0% |
0.5% |
Source: Citizens Research Council ofMichigan, "Outline of theMichigan Tax System." January 2007.
Legislative Analyst: Mark Wolf
Fiscal Analyst: Rebecca Ross
■ This analysis was prepared by nonpartisan House staff for use by House members in their deliberations, and does not constitute an official statement of legislative intent.