Monday, July 15, 2024

Top 5 This Week

Related Posts

Michigan NewsMichigan nonprofit is challenging state’s decision to increase personal taxes, files lawsuit...

Michigan nonprofit is challenging state’s decision to increase personal taxes, files lawsuit go bring them down

Michigan – The Michigan Court of Appeals is set to make a decision on the Mackinac Center for Public Policy’s legal fight against an incorrectly raised income tax rate by March 11, as announced by the state Supreme Court on Wednesday. If there’s a need to challenge this decision, it must be brought to the Michigan Supreme Court by March 25, 2024.

Michigan Department of Treasury raised taxes to 4.25% in 2024

The dispute began when the Michigan Department of Treasury decided to increase the personal income tax rate to 4.25% in 2024, reversing a reduction to 4.05% that occurred last year. This reduction was possible because of a 2015 law that lowers taxes automatically if state earnings grow faster than inflation by a certain margin.

The controversy centers on the state’s claim that the term “current rate” in the legislation implies that any reduction in income tax applies only to one year. This interpretation contradicts the actual wording of the law and what the lawmakers intended when they drafted it, indicating that any tax reductions should be lasting.

Read also: For the first time in the U.S. history, shuttered nuclear plant in Michigan to reopen thanks to the Biden admin

Representing the case are the Mackinac Center along with Associated Builders and Contractors of Michigan, National Federation of Independent Business, Senator Ed McBroom, Representative Dale Zorn, and six individual taxpayers from various parts of Michigan.

The Michigan Court of Appeals is set to make a decision on the Mackinac Center for Public Policy's legal fight against an incorrectly raised income tax

“This announcement from the Michigan Supreme Court is a significant step toward clarity for Michigan’s 4.9 million taxpayers,” said Patrick J. Wright, vice president for legal affairs at the Mackinac Center. “This illegal tax hike costs taxpayers an additional $714 million a year. The Legislature meant to give permanent tax relief when the state’s revenues got extremely high. We hope the courts will agree and recognize the permanence of any tax cuts under this statute.”

The Mackinac Center filed a bypass motion to the Michigan Supreme Court last week, along with a brief appealing the Court of Claims’ Dec. 21, 2023 decision.

Read also: Michigan’s population is rapidly aging: School closures on the horizon due to enrollment decline and financial struggles

Learn more about the case here.