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2023 Op. Mich. Att'y Gen. [1] (2023)

handle is hein.sag/sagmi0151 and id is 1 raw text is: The following opinion is presented on-line for informational use only and does not replace the official version. (Mich. Dept. of Attorney General Web Site - http://www.ag.state.mi.us) STATE OF MICHIGAN DANA NESSEL, ATTORNEY GENERAL INCOME TAX ACT: Reduction in the income tax rate where a percentage increase in the general fund/general purpose revenue for the preceding fiscal year exceeded the inflation rate for that same period and the inflation rate is positive. An individual income tax rate reduction under MCL 206.51(1)(c) is temporary (i.e., for one year only) and if the income tax rate for a particular year is reduced under MCL 206.51(1)(c), it returns to 4.25% in the subsequent year, as described in MCL 206.51(1)(b). Opinion No. 7320 March 23, 2023 The Honorable Rachel Eubanks State Treasurer Michigan Department of Treasury Lansing, MI 48922 You have requested my opinion on whether the individual income tax rate reduction under MCL 206.51(1)(c) is temporary (i.e., for one year only) or permanent (i.e., for all subsequent years). Specifically, you ask if the income tax rate for a particular year is reduced under MCL 206.51(1)(c), does the income tax rate return to 4.25% in the subsequent year, as described in MCL 206.51(1)(b), or does the rate remain at the reduced rate calculated under MCL 206.51(1)(c)? You indicate that for purposes of your question, it should be presumed that the rate reduction in MCL 206.51(1)(c) is not triggered in consecutive years. In 2015, the Income Tax Act was amended to provide a mechanism by which the income tax rate would be reduced in circumstances where a percentage increase in the general fund/general purpose revenue for the preceding fiscal year exceeded the inflation rate for that same period and the inflation rate was positive. In particular, MCL 206.51(1) provides, in relevant part:

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