Today is April 15… tax day. Across the state, Michigan citizens are working to file their annual tax returns, but how can those same citizens learn more about the taxes they pay and how those taxes are used? To this end, the Citizens Research Council of Michigan (CRC) has updated its most popular report, the Outline of the Michigan Tax System. This report, which serves as a handy resource for many, provides a concise and accessible summary of Michigan taxes and captures all of the changes made to the state and local tax landscape since the last update in March 2012.
In the last year, state policymakers enacted legislation to phase-out most of the personal property tax (PPT) paid by Michigan businesses on commercial and industrial personal property and altered elements of the state tax structure to reimburse local governments for the revenue they stand to lose. Another major change established a “sales tax on the difference” mechanism with regard to automobile and watercraft trade-ins. The new law requires that sales tax be imposed only on the difference between the purchase price and the trade-in price, rather than the entire purchase price as under previous law.
“With the new taxes authorized to ensure reimbursement to local governments for lost personal property tax revenues, Michigan now has 59 taxes that the state (38) and local (21) governments are authorized to levy,” reports Bob Schneider, CRC’s Director of State Affairs.
For each tax contained in the Tax Outline, you can find information on its legal authority, rate, base, administration, and the amount of revenue it raises. The Tax Outline also contains helpful links to official sources, which may contain more details than are available in CRC’s summary outline.
In addition to tracking the details of each tax’s rate and base, the Tax Outline tracks tax revenues from year to year. It is of note that the four years summarized in the Tax Outline show all local government tax revenues declining by a total of $1.1 billion. Over that same period, all state tax revenues increased by a total of $1.2 billion. Several individual types of taxes show the effects of the decline in property values caused by the foreclosure crisis, with total general property tax revenues down 9.3% since 2007 and the state education tax down 12% over this period.