Michigan Income Tax Cut Isn’t Permanent, Court Says (1)

An inflation-based income tax cut is only temporary because the applicable law is unambiguous on this issue, a Michigan appeals court said Thursday, affirming a trial court’s finding.

Section 206.51of the Michigan Income Tax Act sets the income tax rate and was amended under Section 206.51(1)(c) to allow for the “current rate” to be reduced when revenue outpaces inflation by a set amount. The state of Michigan cut the income tax rate to 4.05% from 4.25% after inflation outpaced revenue.

A group of residents, two state lawmakers, and business advocacy groups argued that the tax cut is permanent because 4.05% ...