January 13, 2015


State & Local Taxes in 2015


Michigan Tax Code Features

Progressive Features

• Provides a refundable property tax “circuit breaker” credit via the personal income tax

• Provides a 6 percent refundable Earned Income Tax Credit (EITC)

• Sales tax base excludes groceries

• Requires the use of combined reporting for the corporate income tax

Regressive Features

• Personal income tax uses a flat rate

• Fails to provide refundable child tax credits

Tax Changes Enacted in 2013 & 2014

• Eliminated business property tax on manufacturing equipment

• Legislation enacted that requires remote internet sellers to collect sales and use taxes

ITEP Tax Inequality Index

According to ITEP’s Tax Inequality Index, Michigan has the 29th most unfair state and local tax system in the country. States with regressive tax structures have negative tax inequality indexes, meaning that incomes are less equal in those states after state and local taxes than before (See Ap­pendix B for state-by-state rankings and more details).

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