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CRC Column

The right to criticize government is also an obligation to know what you are talking about. 
-Lent Upson, 1st Executive Director of CRC  


Government Taxation Issues

Tax Impact, Tax Burden & Tax Relief

2009 Tax Revenue Comparison: Michigan and the U.S. Average
Memo 1111 ( February 2012 ) 18 pages

The Citizens Research Council of Michigan has released its analysis of recently released U.S. Census Bureau state and local government finance data. The Census data allow for easy comparisons of tax burdens across the 50 states. This publication provides historical and interstate comparisons of tax revenues.

Key findings from CRC's report include:

  • Michigan's total state and local tax burden has fallen relative to the U.S. On a per capita basis, Michigan has gone from 9th highest, with tax revenues 14 percent above the national average in 1979, to 32nd highest, with tax revenues 12 percent below the national average in 2009. Much of this drop can be explained by Michigan's prolonged poor economic performance.
  • Michigan state and local tax burden measured as a percent of personal income is 1.4 percent above the U.S. average. However, Michigan's tax burden has also declined under this measure. In 1979, Michigan ranked 13th highest, with tax revenues as a percent of personal income 8 percent above the U.S. average. By 2009, Michigan had fallen to 18th highest with tax revenues as a percent of personal income 1.4 percent above the U.S. average.
  • Although Michigan's economy fared substantially worse than the nation's during the 2009 recession, this poor economic performance did not materially affect Michigan's tax ranking. Michigan state and local taxes as a percent of personal income ticked up from 0.4 percent above the U.S. average in 2008 to 1.4 percent above in 2009. However, Michigan's tax ranking stayed at 18th highest. Michigan's relatively poor economic performance did affect Michigan's per capita tax burden ranking with Michigan falling from 30th highest in 2008 to 32nd highest in 2009.
  • Michigan had a relatively high reliance on property taxes in 2009, ranking 11th highest with tax revenues as a percent of income, 22 percent above the U.S. average. Despite the property tax relief efforts of Proposal A of 1994, the heavy reliance on property tax revenues to fund local governments keeps the property tax burden in Michigan above average.
  • Michigan general sales tax revenues were 11 percent above of the U.S. average in 2009, ranking 18th highest, but this ranking was inflated by the Census Bureau classifying a portion of the Michigan Business Tax as a sales tax. If you remove the MBT from the reported sales tax figure, Michigan would rank 31st highest. Michigan state and local individual income tax revenues ranked 35th highest, with the amount raised as a percent of personal income 17 percent below the U.S. average.
  • Michigan ranked 38th highest in corporate income tax revenues in 2009, but that was in large part because a significant portion of the MBT was classified as a sales tax by the Census Bureau, with the remainder placed in the corporate income tax category. Placing all of the MBT in the corporate income tax category would have resulted in Michigan having the 6th highest tax with a burden 83 percent above the U.S. average. The fact that many business taxes levied by states are not included in the Census Bureau's corporate income tax category means that this category is not a good measure for comparing the overall business tax burden across states.
  • In 2011, Michigan repealed the MBT and replaced it with a corporate income tax (CIT). The CIT is expected to raise $1.6 billion less than the MBT. These revenues were replaced in part with a $1.3 billion individual income tax increase. If these changes had been in place in 2009, Michigan would have ranked 46th highest in corporate income tax revenues as a percent of personal income, second lowest among states that levy a corporate income tax. Michigan's individual income tax ranking would have risen from 35th highest to 31st highest.

Tax Revenue Comparison: Michigan and the U.S. Average
Memo 1080 ( June 2006 ) 8 pages

Recently released data from the U.S. Bureau of the Census shows that Michigan state and local taxes have moved much closer to the national averages over the last 25 years. Total tax revenues, both per capita and per $1,000 of personal income, are lower than the national average as are revenues from individual income and sales taxes. The property tax, despite Proposal A, is higher than the national average.

pdf File Tax Revenue Comparison: Michigan and the U.S. Average
Memo 1059 ( December 2001 ) 8 pages

Estimates of 1999 revenues of state and local government in the 50 states and the District of Columbia recently released by the U.S. Department of Commerce, Bureau of Census provides an opportunity to examine Michigan's comparitive tax ranking 5 years after the changes brought about by Proposal A of 1994. These data show that Michigan total state and local tax revenues were close to the U.S. average in 1999, unlike years prior to 1994 when Michigan taxed its residents at above average levels. Further analysis, evident by comparing 1999 data with data from recent years, shows that some of the interstate competitiveness Michigan gained by cutting property tax rates and capping assessment increases has eroded since 1994. Finally, Proposal A has been successful in creating greater balance among the property, sales, and income taxes.

Note 99-02, pdf File Michigan Tax Revenues Relative to the U.S. Average, Proposal A of 1994 had the effect of reducing property taxes and income taxes and increasing sales taxes. As a result, Michigan has moved toward balance among the property, sales, and income taxes. Census data on state and local government revenues and expenditures per capita and per $1,000 of personal income compare Michigan to the national averages for these taxes and the overall tax burden. ( November 99 ) 2 pages [28 KB]

CC 992, pdf File State and Local Government Expenditures and Revenues in the 15 Most Populous States Compared Michigan to other major states on major revenue sources and major expenditure categories. ( November 90 ) 6 pages

CC 866, The New (state) Tax Relief Program in Brief ( June 73 ) 4 pages

CC 865, Tax Relief and Budget Considerations (state) ( May 73 ) 2 pages

The Michigan Tax System

Statewide Ballot Issues: Proposal 2012-05
Two-Thirds Vote to Increase State Taxes

Memo 1120 ( September 2012 ) 6 pages

On November 6, 2012, Michigan voters will determine whether the Michigan Constitution should be amended to require either an affirmative vote of two-thirds of the members serving in each chamber of the Michigan legislature (House of Representatives and Senate), or an affirmative vote of Michigan electors at a November election in order to; a) impose new state taxes, b) expand the base of a state tax, or c) increase the rate of a state tax.

This is an analysis of this proposed constitutional amendment that looks at what taxes would be covered and current supermajority vote requirements in the Michigan Constitution. The analysis considers how this tax limitation would interact with Michigan's existing tax and expenditure limitations, looks at similar requirements in other states, and considers a number of arguments that can be made for and against this proposed amendment.

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

The Michigan Tax Climate and Outline of the Michigan Tax System are published every two years. Back editions can be ordered by contacting CRC direct.

Report 317, 1996 Michigan Tax Climate, (3rd ed.) Provides comparative information about the tax burden shouldered by residents of 15 states similar to Michigan. ( May 96 ) 77 pages [This publication is sold out! We are thinking of publishing a fourth edition in 1998. Please let us know your interest in this document in the Comments box.]

CC 1015, pdf File What (If Anything) Should Be Done Regarding The Michigan Property Tax? Examined a history of property tax-school finance proposals considered by voters between 1972 and 1993. ( February 93 ) 6 pages [62,511 bytes]

Report 260, Taxation and the Referendum in Michigan ( March 80 ) 32 pages

The Misuse and Abuse of Special Assessments in Michigan
CC 944, ( October 83 ) 2 pages

--- See also Misc. Report for detailed discussion ---

pdf File The Misuse and Abuse of Special Assessments in Michigan
Misc., ( October 83 ) 12 pages

It is apparent that the evolution of special assessments in Michigan has distorted the underlying special benefit principle beyond recognition. Municipal operating services that provide a general benefit to the general public, such as police and fire protection, garbage collections, and library services, are being financed under the guise of providing a special benefit to the property assessed. In addition, these levies take on the characteristics of general ad valorem taxes while circumventing the constitutional and statutory restrictions placed on the general ad valorem property tax. Since the entanglement of special assessments and property taxes occurred over a period of time, it appears that separating them will also take time.

Tax Dedication

pdf FileThe Earmarking of State Taxes in Michigan,
CC 1038, ( December 95 ) 8 pages

Describes the past and present status of dedicated state taxes and Michigan.

General Property Tax

pdf File The Growing Difference Between State Equalized Value and Taxable Value in Michigan,
Memo 1058, ( March 2001 )

Proposal A of 1994 superimposed upon the property assessment system already in place, a modified acquisition value method of determining taxable value. Instead of applying the tax rate to annual assessments of property at 50 percent of true cash value, commonly referred to as state equalized value, it is applied to taxable value, in which increases on individual parcels of property that were not acquired during the tax year are limited to the lesser of five percent or inflation. The property assessment as of December 31, 1999, for taxes levied in 2000, marks the sixth year of operating under this system, providing an opportunity to examine the impact it has had on government finances and on providing relief to taxpayers.

For the 2000 tax year, the statewide taxable value was 84.6 percent of state equalized value. Local units of government and classes of property have been affected in varying degrees by this new system of assessment. In addition to examining those impacts, this paper will consider what the future might hold and will analyze some of the experiences of the modified value acquisition system in California.

Memo 1058 contains county totals for SEV and TV. To find the ratio of TV to SEV in individual cities and townships, Click Here.

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 325, pdf File Delinquent Property Taxes as an Impediment to Development in Michigan, Examines the property tax delinquency process, the issues invovled with reform, and some potential remedies. ( April 1999 ) 24 pages

Note 97-01, pdf File Ad Valorem Special Assessments in Michigan -- Summarizes Report 319 -- ( February 97 ) 2 pages

Report 319, pdf File Ad Valorem Special Assessments in Michigan, Examined the constitutional and statutory differences between property taxes and traditional special assessments and the increasing tendency of the Legislature to authorize units of local government to levy ad valorem special assessments which have characteristics of both property taxes and traditional special assessments. --- See also Note 97-01 --- ( January 97 ) 21 pages

Report 312, pdf File Analysis Of Statewide Ballot Proposal A: Elementary-Secondary School Finance, Would amend the Michigan Constitution to permit school operating taxes to be imposed on a nonumiform basis; limit the growth in assessments on individual parcels of property; increase the sales tax rate to six percent; require that the state guarantee school district operating revenue per pupil; and require a 3/4 vote to increase school operating taxes. Also describes statutory changes that would become effective with passage or alternatives that would become effective with defeat ( February 94 ) 26 pages [2,189,771 bytes]

CC 1024, pdf File Statewide Ballot Proposal A: Elementary-Secondary School Finance, --- Summarizes Report #312 --- ( February 94 ) 6 pages [19,278 bytes]

CC 1017, pdf File Statewide Ballot Proposal: Proposal A -- Local Property And School Finance Reform, Analyzed a property tax-school finance proposal which was on the statewide ballot at the June 1993 special election. ( May 93 ) 6 pages [42,318 bytes]

CC 1015, pdf File What (If Anything) Should Be Done Regarding The Michigan Property Tax? Examined a history of property tax-school finance proposals considered by voters between 1972 and 1993. ( February 93 ) 6 pages [62,511 bytes]

CC 1012, pdf File State Ballot Proposals A and C -- Proposed Property Tax Amendments, (A: Legislative & C: Initiative) ( September 92 ) 6 pages [42,878 bytes]

Memo, Property Taxes in Michigan: A Brief Description of the Problem and Current Proposed Solutions ( September 91 ) 3 pages

Memo, Supplementary to Issues Relative to the Initiative Petition to Reduce Property Assessment Ratios ( October 90 ) 5 pages

Memo, Issues Relative to the Initiative Petition to Reduce Property Assessment Ratios Examined the statutory initiative process; the meaning of the term "session days" and other related issues. ( September 90 ) 5 pages

CC 944, The Misuse and Abuse of Special Assessments in Michigan --- See also Misc. Report for detailed discussion --- ( October 83 ) 2 pages

Misc., The Misuse and Abuse of Special Assessments in Michigan --- Detailed Report of CC #944 --- ( October 83 ) 12 pages

Truth in Local Property Taxation and Assessment
CC 929, ( May 82 ) 6 pages

Two new state statutes regulating local property taxes take effect in 1982 - "truth in Taxation" and "Truth in Assessment." These two laws are in addition to two existing laws -- "Truth in Equalization" which was adopted in 1976 and the millage rollback requirements provided for by the Tax Limitation Amendment to the Michigan Constitution adopted in 1978. Two of these laws are designed to limit the growth of property tax revenues and two are designed to provide local accountability for assessment levels. Although they are applied independently, they interact with each other.

pdf File Homestead Exemption For Senior Citizens
CC 743, ( October 63 ) 4 pages

Summarizes and analyzes the governor's proposal to allow senior citizens to defer a portion of their property taxes.

Property Taxes in Wayne County

WebDoc 98-02, Separate Tax Limitations for Wayne County, On April 23, 1998, the Wayne County Tax Allocation Board requested the Citizens Research Council to review the issue of establishing a separate tax limitation for the County and abolishing the Tax Allocation Board. Based on this response, and other information at their disposal, the Board has decided to place a question before the voters at the August 4, 1998 Primary Election. ( May 1998 ) 8 pages.

Memo 1050, pdf File A Supermajority Requirement for Wayne County Tax Increases, Description of the August 4, 1998, primary ballot issue requiring a two-thirds majority of county commissioners and a 60 percent vote of the electors to adopt any tax increases. ( July 98) 2 pages.

Personal Property Taxation (includes taxation of inventories)

Statewide Ballot Issues: Proposal 2014-1
Voter Approval of a New Statewide Local Tax to Reimburse Local Governments for Personal Property Tax Reforms

Memo 1128 ( July 2014 ) 10 pages

Proposal 1, the only statewide measure on the August 5 ballot, asks Michigan voters to approve the conversion of a portion of the state's current use tax to a new local tax as part of a plan to reimburse local governments for the cost of recently enacted exemptions of business property from the personal property tax. The Citizens Research Council of Michigan (CRC) has released its analysis of the ballot proposal to explain the ballot measure for voters.

The state Legislature and Governor enacted legislation in 2012 and 2014 that bring significant personal property tax (PPT) relief to Michigan businesses. Because the PPT is levied locally on the taxable value of business property, which includes everything from business equipment and machinery to chairs and computers, local governments stand to be most directly affected by these changes.

"Past efforts to exempt business personal property from the local property tax base eventually failed because the state was never able create a reimbursement method to keep local governments whole," said Bob Schneider, CRC's Director of State Affairs. "For some local units with a strong manufacturing base, the tax on personal property brings in a lot of local revenue."

To address this local impact, the legislation creates a mechanism to reimburse local governments for any lost PPT revenues. A key element of the plan is the conversion of a portion of the state's current use tax into a new local community stabilization share tax. The revenues of this new tax would be distributed to local governments to offset lost PPT revenues through a new special authority -- the Local Community Stabilization Authority (LCSA). The LCSA is considered a local unit of government in the legislation, but would look rather different than other local governments.

"The new authority is defined as a local government, but has statewide boundaries, so we essentially have a very unique statewide local unit of government set up to administer the reimbursement of other local units of government," said Schneider. "This peculiar arrangement really revolves around assuring local governments that they'll get their money. They don't want to see this money pass through the state government's appropriations process."

The conversion of a portion of the state's use tax to a new local tax, however, creates other constitutional issues. In 1978, voters added several sections to the Michigan Constitution (commonly referred to as the "Headlee Amendment") that limit the taxing authority of both the state and local governments. Calling the new tax a local tax means it has to be approved by voters, which explains the need for the ballot measure.

"Because the law creates a new local tax, that local tax needs to be approved by local voters," said Schneider. "And, in this case, because the 'local' tax is administered by a local authority that happens to have statewide boundaries, the usual local vote now becomes a statewide vote."

The tax shift will have significant fiscal implications for the state's General Fund. The state will lose a portion of its current use tax revenues under the proposal. The analysis suggests state general fund/general purpose (GF/GP) revenues will be $107 million lower in FY2016 and $349 million lower in FY2017 as more and more state revenue is shifted to the new local tax. By FY2025, the GF/GP revenue loss is expected to reach $500 million.

Because all of the enacted PPT legislation was "tie-barred" by the legislature, the August vote effectively becomes a referendum on the entire package of reforms. If the ballot question is approved by voters, the personal property tax reforms will go forward, with local revenue reimbursement from the new tax. If the measure fails, all provisions of the personal property tax reforms will be repealed effective for tax year 2015, meaning that all businesses would once again be subject to any relevant tax levies on personal property.

Note 99-01, pdf File Proposed Changes in Michigan's Personal Property Tax Tables, Describes the changes that will result from revision of the depreciation schedules for personal property. ( July 1999 ) 4 pages. [47KB]

Intangibles Tax

PDF FileThe Taxation of Intangible Personal Property in Michigan
Memorandum 192-3 (March 19, 1958) 9 pages

As a public service the Research Council prepared digests of staff reports to the Michigan State Tax Study Committee. This digest on the intangibles tax discusses the basis for taxation, the tax base, exemptions, tax rates, deductions, situs, yield, and the distribution of revenues. It looks at how other states tax intangibles and discusses a few particular issues, such as the treatment of accounts receivable; the taxation of banks and other financial businesses; face, par, or contributed value; and administration of the tax. It concludes by addressing the economic effects of the tax.

TIFA's/DDA's/LDFA's

Can Dedicated Millages and Tax Increment Financing Coexist in Michigan?
CRC Note 2013-01 ( January 2013 ) 5 pages

The Detroit Free Press ran a series of articles last week that documented Wayne County communities diverting for their own economic development purposes taxes were levied to support the Detroit Zoo. Other governmental entities have asked the state Attorney General or the courts for clarification of issues similar to those raised by the zoo officials. Now the Citizens Research Council of Michigan has released a brief paper that asks: Can Dedicated Millages and Tax Increment Financing Coexist in Michigan?

Since 1975, Michigan law has authorized cities, villages, and townships to establish special authorities with the ability to "capture" taxes levied within a confined geographic district to be funneled back into that district as an economic development tool. These authorities include Downtown Development Authorities, Tax Increment Financing Authorities, Local Development Financing Authorities, Brownfield Redevelopment Authorities, Historic Neighborhood Tax Increment Financing Authorities, Corridor Improvement Authorities, and Water Resource Improvement Tax Increment Finance Authorities.

Tax increment financing takes tax revenues from where they were intended when they received voter approval and diverts them for economic development purposes. This practice has caused the governments from whom the revenues are being captured to levy taxes at artificially higher levels to yield sufficient revenues for their own purposes. It also creates a shadow government structure wherein resources are directed for economic development purposes without being subjected to the budgetary scrutiny that other resources and expenditures are put through.

Report 323,  Filepdf Selected Michigan Economic Development Programs -- 1997, A compendium of state and federal efforts that promote economic development in Michigan. ( December 97 ) 22 pages [205,508 bytes]

CC 1029, pdf File How School Finance Reform Affects Municipal Economic Development Incentives, Examines the affects of property tax changes resulting from Proposal A of March 1994, on tax abatements and tax increment financing ( August 94 ) 4 pages [19,482 bytes]

pdf Document Municipal Government Economic Development Incentive Programs in Michigan
CC 958, ( March 86 ) 4 pages

--- See also CC #959 and Report #280 ---

Municipal Government Economic Development Incentive Programs in Michigan
Report 280, ( February 86 ) 59 pages

Part I of this paper provides a brief description of each of the five economic development programs and explains the interaction among the various programs. Two hypothetical business firms located in Central City - Acme Widget Production Company, a manufacturer of widgets, and ABC Widget Sales, a widget retailer, will be used throughout Part I to illustrate the various programs. Part II is an analysis of the tax abatements granted, as of December 31, 1983, by cities and townships with 10,000 or more residents.

Tax Abatements

Report 323, pdf File Selected Michigan Economic Development Programs -- 1997, A compendium of state and federal efforts that promote economic development in Michigan. ( December 97 ) 22 pages [205,508 bytes]

CC 1029, pdf File How School Finance Reform Affects Municipal Economic Development Incentives, Examines the affects of property tax changes resulting from Proposal A of March 1994, on tax abatements and tax increment financing ( August 94 ) 4 pages [19,482 bytes]

pdf Document The Use of Property Tax Abatements in Michigan, 1974-1983
CC 959, ( March 86 ) 8 pages

--- See also CC #958 and Report #280 ---

pdf Document Municipal Government Economic Development Incentive Programs in Michigan
CC 958, ( March 86 ) 4 pages

--- See also CC #959 and Report #280 ---

Municipal Government Economic Development Incentive Programs in Michigan
Report 280, ( February 86 ) 59 pages

Part I of this paper provides a brief description of each of the five economic development programs and explains the interaction among the various programs. Two hypothetical business firms located in Central City - Acme Widget Production Company, a manufacturer of widgets, and ABC Widget Sales, a widget retailer, will be used throughout Part I to illustrate the various programs. Part II is an analysis of the tax abatements granted, as of December 31, 1983, by cities and townships with 10,000 or more residents.

Property Tax Limitation

Article IX -- Finance and Taxation
Report 360-12 ( August 2010 ) 15 pages

The Great Recession has had significant negative effects on state and local government services in Michigan, including public education, as tax revenues declined in response to the slowdown in economic activity. As governments struggle to balance their annual budgets during these austere times, they do so within the confines of the constitutional limitations contained within Article IX. These limitations range from prescribing the proportion of value at which property may be taxed, to requiring voter approval before units of local government may increase certain taxes and indebtedness, to limiting the forms and rates of taxation (state and local), to specifying how the revenues from certain taxes are to be expended.

Prior to the recent economic slide, Article IX has been the subject of the most attempts to amend the Constitution (29 proposed amendments), indicating the importance of the issues contained therein. The article has been successfully amended 10 times, most recently in 2006. The two most significant amendments were Proposal E of 1978 (Headlee Amendment) and Proposal A of 1994; both dealt with multiple sections and both created tax and/or spending limitations. It is expected that given the State of Michigan's fiscal challenges over the past eight years and the public's general interest in state and local tax and finance issues, a constitutional convention would spend considerable time addressing the complex and varied provisions of Article IX.

Administration of the property tax, the main revenue source for local governments and an already complex tax by its very nature, has been made more complex by a series of constitutional amendments which have had the effect of layering tax limitations on top of existing provisions. "A constitutional convention may want to begin with a goal of eliminating some of the complexity of the property tax system," Lupher said.

pdf File The Growing Difference Between State Equalized Value and Taxable Value in Michigan,
Memo 1058, ( March 2001 )

Proposal A of 1994 superimposed upon the property assessment system already in place, a modified acquisition value method of determining taxable value. Instead of applying the tax rate to annual assessments of property at 50 percent of true cash value, commonly referred to as state equalized value, it is applied to taxable value, in which increases on individual parcels of property that were not acquired during the tax year are limited to the lesser of five percent or inflation. The property assessment as of December 31, 1999, for taxes levied in 2000, marks the sixth year of operating under this system, providing an opportunity to examine the impact it has had on government finances and on providing relief to taxpayers.

For the 2000 tax year, the statewide taxable value was 84.6 percent of state equalized value. Local units of government and classes of property have been affected in varying degrees by this new system of assessment. In addition to examining those impacts, this paper will consider what the future might hold and will analyze some of the experiences of the modified value acquisition system in California.

Memo 1058 contains county totals for SEV and TV. To find the ratio of TV to SEV in individual cities and townships, Click Here.

WebDoc 98-02, Separate Tax Limitations for Wayne County, On April 23, 1998, the Wayne County Tax Allocation Board requested the Citizens Research Council to review the issue of establishing a separate tax limitation for the County and abolishing the Tax Allocation Board. Based on this response, and other information at their disposal, the Board has decided to place a question before the voters at the August 4, 1998 Primary Election. ( May 1998 ) 8 pages.

CC 1039, pdf File �Headlee Rollbacks� and the Constitutionality of Public Act 415 of 1994, Examined the interaction between assessed value, which is the basis of Headlee millage rollbacks, and the taxable value cap as implemented by the Legislature. ( January 96 ) 4 pages [24,950 bytes]

CC 1013, pdf File The Fifty Mill Limitation: An Update, Updated a list of those instances in which aggregate millages levied by unchartered counties, unchartered townships, and school districts exceeded 45 mills. ( November 92 ) 6 pages [41,459 bytes]

CC 1001, pdf File Enforcement of the Fifty Mill Limitation --- Summarizes Report #295 --- ( October 91 ) 2 pages [31,843 bytes]

CC 985, pdf File Local Property Tax Limitations in Michigan, --- Summarizes Report #295 --- ( October 89 ) 4 pages

Report 295, pdf File Local Property Tax Limitations in Michigan Examined the constitutional, statutory, and judicial history of the 15, 18, and 50 mill property tax limitations; Headlee Amendment provision; contains a list of those instances in which aggregate millages levied by unchartered counties, unchartered townships, and school districts exceeded 45 mills. --- See also CC #985 --- ( September 89 ) 36 pages

Report 284, Are Judgment Levies, Bonds, and Other Taxes Without Constitutional Limits Permitted Under the Michigan Constitution? Does the Michigan Constitution give the Legislature power to authorize local governments to impose taxes and contract debts without voter approval and without or outside defined limits? ( May 87 ) 51 pages

CC 964, pdf File Are Judgment Levies, Bonds, and Other Taxes Authorized without Limits Permitted under Michigan Constitution? --- Summarizes Report #284 --- ( June 87 ) 8 pages

Truth in Local Property Taxation and Assessment
CC 929, ( May 82 ) 6 pages

Two new state statutes regulating local property taxes take effect in 1982 - "truth in Taxation" and "Truth in Assessment." These two laws are in addition to two existing laws -- "Truth in Equalization" which was adopted in 1976 and the millage rollback requirements provided for by the Tax Limitation Amendment to the Michigan Constitution adopted in 1978. Two of these laws are designed to limit the growth of property tax revenues and two are designed to provide local accountability for assessment levels. Although they are applied independently, they interact with each other.

CC 920, pdf File Ballot Issues: Wayne County: Proposition J -- A Separate and Fixed Tax Limit of 18 mills; Propositions K, L, & M--Extra-Voted Millage; Detroit: Proposal Y -- 3.5 Mills Extra-Voted for the Detroit Schools ( October 80 ) 5 pages

PDF File State Ballot Issues: Proposal I -- The Tax Limitation Proposal of Taxpayers United
CC 899, ( August 78 ) 4 pages

This analysis of the Taxpayers United ballot proposal (now commonly known as the Headlee Amendment) described how the state and local tax limitations would work. (also see White Paper) (approved 52% for to 48% against)

Property Tax - Exemption

Memo, Exempting New Personal Property from Ad Valorem Taxation ( August 86 ) 18 pages

Property Transfer Tax

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

Report 312, pdf File Analysis Of Statewide Ballot Proposal A: Elementary-Secondary School Finance, Would amend the Michigan Constitution to permit school operating taxes to be imposed on a nonumiform basis; limit the growth in assessments on individual parcels of property; increase the sales tax rate to six percent; require that the state guarantee school district operating revenue per pupil; and require a 3/4 vote to increase school operating taxes. Also describes statutory changes that would become effective with passage or alternatives that would become effective with defeat ( February 94 ) 26 pages [2,189,771 bytes]

Personal Income Tax

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

PDF File State Ballot Issues: Proposal D -- The Graduated Income Tax
CC 890, ( October 76 ) 4 pages

Proposal would have created two brackets separated at $20,000 in 1977, but would have allowed the legislature to decide whether to levy a flat or graduated tax in years that followed.

PDF File State Ballot Issue #1 -- The Graduated Income Tax
CC 809, ( October 68 ) 4 pages

Proposition No. 1 on the November 5, 1968, statewide ballot was a proposed amendment to the state constitution: "An income tax at flat rates or graduated as to rate or base may be imposed by the state or any of its subdivisions." This paper looked at Michigan's history of levying income taxes, looked at the issue of graduated taxes versus flat rate taxes, and compared Michigan to the taxes levied in other states.
(defeated 23% for to 77% against)

Local Income Taxes (Local Nonproperty Taxes)

Local-Option City Income Taxation in Michigan
Memorandum 1103 ( January 2011 ) 10 pages

Michigan's prolonged economic recession is creating fiscal stress for many local governments and causing city government officials to seek alternative revenue sources. Michigan law has authorized local-option income taxes for city governments since the 1960s, but only 22 cities have chosen to levy this tax. CRC has released a new paper to explain how city income taxes work, analyze the history of the cities levying this tax, and investigate the incentives and disincentives municipal policy makers may wish to consider relative to imposition of this tax.

CRC's analysis found that the city income tax has worked best for the smaller core cities that levy the tax. These cities serve as employment hubs in their regions, but are relatively small relative to other Michigan cities, with populations of 2,000 to 11,000. "Income tax revenue growth in the cities of Portland, Big Rapids, and Albion has outpaced revenues from the state income tax and income tax revenues for most of the other cities," reporter Eric Lupher, CRC's Director of Local Affairs.

Lupher continued, "While local-option income taxes have proven a suitable supplement to property taxes, the pace of revenue growth, even with the property tax limitations, and the reliable pattern of growth cannot be replicated by income taxes."

More cities may consider local-option income taxes in the coming years to supplement property taxes because of the property tax limitations that will constrain revenue growth when housing markets finally turn around and because state revenue sharing is likely to continue to be diverted to fund other state functions.

pdf File The 2000 Census and State and Local Finance in Michigan
Report 328, (March 2000 ) 32 pages

The study identifies 34 provisions in state law where a reference to local government population affects state and local government finance: 11 affect the allocation of state funds to local governments and 22 affect local governments� authority to raise revenue. The potential changes of the most significance are the provisions in: (1) the State Revenue Sharing Act that eliminate limitations on growth for as many as 1,000 cities, villages, and townships whose population increases more than ten percent between censuses; (2) the Downtown Development Authority Act that could allow Detroit to raise its tax from one to two mills; and (3) the City Income Tax Act that could restrict Saginaw�s ability to levy its tax at a rate higher than that generally allowed other cities.

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

PDF File State Ballot Issues: Proposal D -- The Graduated Income Tax
CC 890, ( October 76 ) 4 pages

Proposal would have created two brackets separated at $20,000 in 1977, but would have allowed the legislature to decide whether to levy a flat or graduated tax in years that followed.

Detroit Income Tax

Inheritance, Estate, and Gift Taxes

pdf File Death and No Taxes?,
Note 2001-03 ( July 2001 ) 2 pages

Examines the effect federal tax reform eliminating the federal estate tax will have on the state estate tax and state tax revenues.

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

PDF File Inheritance, Estate and Gift Taxes
Memorandum 192-21 (August 18, 1958) 3 pages

As a public service the Research Council prepared digests of staff reports to the Michigan State Tax Study Committee. This memo looks at the levy of estate and inheritance taxes in Michigan, including equity issues, revenue enhancement possibilities, and interstate comparisons.

Michigan Taxes on Business

Value Added Taxes

Michigan Single Business Tax (includes former Business Activities Tax)

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

Memo, The Single Business Tax in Michigan: The Capital Acquisition Deduction ( September 91 ) 2 pages

CC 996, pdf File The Single Business Tax and the Capital Acquisition Deduction ( March 91 ) 4 pages [36,019 bytes]

Insurance Premiums Taxes

PDF FileTaxation of Insurance Premiums
Memorandum 192-6 (April 7, 1958) 4 pages

As a public service the Research Council prepared digests of staff reports to the Michigan State Tax Study Committee. This digest on the taxation of insurance premiums addresses how the tax developed and the treatment of foreign (based in other states) and domestic companies. It compares the Michigan tax to those levied in other states, examines the rationale for the tax, and analyzes the tax's mechanics.

General Sales Taxes

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

pdf File Issues Relative to the Constitutionality of Local Sales Taxation in Michigan,
Report 305, ( July 92 ) 14 pages

Examined Public Act 180 of 1991 which authorized selected units of local government to impose taxes on hotel rooms, automobile rentals, and restaurant meals, the latter of which appeared indistinguishable from a sales tax. Examined the constitutionality of local sales taxes in light of constitutional provisions and case law.

CC 1006, pdf File Issues Relative to the Constitutionality of Local Sales Taxes in Michigan, --- Summarizes Report #305 --- ( June 92 ) 2 pages [33,657 bytes]

CC 871, About Exempting Food and Drugs from the Sales Tax --- See also CC 876 --- ( November 73 ) 4 pages

CC 871, About Exempting Food and Drugs from the Sales Tax --- See also CC 876 --- ( November 73 ) 4 pages

Selective Sales Taxes

Liquor Tax & Regulation

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

Motor Fuel Tax

What if Michigan Had Enacted a Percentage Tax on Gasoline in 1997?
Note 2011-02 ( November 2011 ) 3 pages

Last week, Governor Snyder proposed replacing the state's current 19 cent per gallon tax on gasoline with a tax based on a percentage of the price at the wholesale level. Michigan last increased its gasoline tax in 1997, when the rate was increased from 15 cents. Both inflation and a decrease in miles driven have reduced the purchasing power of the state's gas tax. While the proposal is for the percentage tax to be revenue neutral when enacted, the Governor has argued that the new tax is a more viable approach to funding roads and bridges, and that over the long run it will better maintain its purchasing power.

CRC has analyzed what gasoline tax revenues would have been over the past 14 years if the state had enacted a wholesale tax based on price back in 1997, rather than the current 19 cent tax. "CRC finds that if the state had enacted a price based tax equivalent to the 19 cent tax, it would have raised over $12 billion more in gasoline tax revenues over the past 14 years. Tax revenues in fiscal year 2011, would have been just under $3 billion compared to the roughly $830 million raised by the current tax.

The Impact of the Taxation of Gasoline in Michigan
CRC Note 2006-01 ( May 2006 ) 4 pages.

High gasoline prices have engendered numerous discussions regarding the role of state taxation in gasoline pricing. The Citizens Research Council of Michigan has analyzed the taxation of gasoline in Michigan and its effect on the pump price of gasoline and on state revenues.

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Memo 1047, pdf File The Taxation of Diesel Fuel, Explains what tax rates are paid by motor carriers in Michigan, where the tax revenues go, and why more tax revenue are collected from the Motor Carrier Fuel Tax than from the Diesel Fuel Tax ( November 97 ) 4 pages [88,876 bytes]

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

State Ballot Issues:
CC 876, ( October 74 ) 6 pages

Proposal A -- Limiting Use of Motor Fuel Tax Funds (restrict amounts available for state police patrol and public transportation); Proposal B -- Vietnam Veterans Bonus Bonds (authorize a $205 million bond sale to pay bonuses to Michigan residents that served during the Vietnam War); Proposal C -- Removal of Sales Tax on Food and Prescription Drugs (a constitutional amendment placed on the ballot by initiative petition that was approved 56% for to 44% against); Proposal D -- State-Wide Transportation (authorize a $1.1 billion bond sale for urban transportation, inter-city rail and bus systems, people movers, airport development, port facilities, and non-motorized transportation)

Beer and Wine Taxes

Outline of the Michigan Tax System, (20th Edition)
Report 327, ( October 99 ) 84 pages

With descriptions of all 45 state and local taxes, the "Tax Outline" is the definitive, easy-to-use desktop reference guide. This edition of our biennial publication is available, either by accessing the pdf version here, or by using the html version.

The Outline of the Michigan Tax System provides legal citations, detailed descriptions of tax rates and bases, administrative information, and data on the amount and distribution of revenues from each tax. It is conveniently organized by type of tax and is color-keyed to identify each tax as either state or local. Recent statutory changes and a glossary are also included.

Report 322, Outline of the Michigan Tax System (19th Edition) The most frequently requested CRC publication continues to be the "Tax Outline," a desk-top reference to the Michigan's state and local tax system. The 19th edition describes state and local taxes levied in Michigan and summarizes the tax laws enacted by the Legislature between January 1, 1995 and August 1, 1997. ( September 97 ) 40 pages

State Licenses & Licensing (Automobile Registration & Driver Licensing)

Local Nonproperty Taxes, User Fees & Special Charges

 

 

 

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Last Updated July 2, 2014