2024 will See Higher Personal Income Tax Rate, Michigan Court of Appeals Decides
Update: Mar 2-31, 2024
In a recent ruling, the Michigan Court of Appeals upheld setting the state’s personal income tax rate to 4.25%, dismissing appeals for a return to the 4.05% rate that we saw in 2023. The three-judge panel’s unanimous decision was grounded on an absence of legislative language declaring that the rate reduction would be permanent. The court also noted that including such verbiage would introduce the potential for compounding reductions that could jeopardize the existence of an income tax altogether.
The case, initiated by a coalition including two lawmakers and various taxpayers, contested Attorney General Dana Nessel’s opinion that the reduced rate only applied to 2023. The Mackinac Center for Public Policy, which led the suit, plans to appeal based on the implication that the bill’s language necessitates a permanent tax cut. Stay tuned for further developments as the appeal progresses.