House Approves Income Tax Reduction

Mar 21, 2025

by Liz Gullett

As MLC’s Communications and Social Media Manager, Liz Gullett keeps clients informed and up-to-date on the goings on in Lansing and the Capitol.

This week, the House of Representatives approved legislation reducing Michigan’s income tax rate from 4.25% to 4.05%, effective January 1, 2025.

Key Points:

    • House Bill 4170 was introduced by Representative Kathy Schmaltz (R-Jackson).
    • According to the nonpartisan House Fiscal Agency, the new tax rate would reduce state revenue by $539.3 million in the current fiscal year.
    • Barring future legislative action, the reduction would be permanent.

Background:

    • In 2015, legislation was signed into law by then-Governor Rick Snyder requiring a reduction to the income tax whenever state general fund revenues grow faster than inflation.
    • This provision was triggered in 2023, reducing the tax rate from 4.25% to 4.05% for only one year.
    • There was a lot of contention over whether the rate reduction should have been permanent.

Next Steps:

    • The bill was referred to the Senate Finance, Insurance, and Consumer Protection Committee for consideration.

There is similar legislation in the Senate, introduced by Senator Roger Victory (R-Hudsonville), reducing the income tax rate to 3.9%. That bill remains before the Senate Finance, Insurance, and Consumer Protection Committee.

Michigan Legislative Consultants is a bipartisan lobbying firm based in Lansing, Michigan. Our team of lobbyists and procurement specialists provide a wide range of services for some of the most respected companies in America. For more on MLC, visit www.mlcmi.com or connect with us on LinkedIn and Twitter.

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