Income Tax Reduction Moves

Mar 14, 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.

The House Finance Committee reported legislation reducing the state 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).
    • 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. Under the proposal, the reduction would be permanent, barring future legislative action.

Fiscal Impact:

    • According to the nonpartisan House Fiscal Agency, revenue would decline by $539.3 million in the current fiscal year.
    • During FY 2025-26, revenue would decline by $713 million.
    • During FY 2026-27 revenue would decline by $727.6 million.

Next Steps:

    • The bill was sent to the House floor for further consideration.

On Thursday, a similar proposal was introduced by Senator Roger Victory (R-Hudsonville). SB 151 would reduce the state’s personal income tax rate from 4.25% to 3.9%. The bill was referred to 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.

Recent Posts

MPSC Commissioner Named

MPSC Commissioner Named

Shaquila Myers was named to the Michigan Public Service Commission this week by Governor Gretchen Whitmer. She is appointed to represent Democrats for a term commencing July 21, 2025, and expiring July 2, 2031. Ms. Myers succeeds Alessandra Carreon, whose term...

Chief Climate Officer Announced

Chief Climate Officer Announced

Former Michigan Public Service Commissioner Alessandra Carreon was named the chief climate officer at the Department of Environment, Great Lakes, and Energy (EGLE). In the role, she will lead EGLE’s Office of Climate Energy, which works to bring environmental...

June Unemployment Rate Decreases

June Unemployment Rate Decreases

Michigan’s seasonally adjusted jobless rate last month declined one-tenth of a percentage point from the prior month to 5.3%. During the same period, the national rate also decreased by one-tenth of a percentage point to 4.1%. Key Points: Employment receded by 4,000...

Looking for older articles?

We’ve recently made improvements to our blog to provide a better user experience. If you’re searching for older posts, click here to search our archive.

Michigan Legislative Consultants

Michigan Legislative Consultants
110 W. Michigan Avenue
Suite 500
Lansing, MI 48933
517.372.2560
517.372.0130 fax

1001 Woodward Avenue
Suite 500
Detroit, MI 48226

MLC is proud to be the Michigan member of NASL