HB 5267 Summary

• Amends Michigan's Income Tax Act to modify individual income tax rates, establishing new rate brackets effective October 1, 2012 through January 1, 2016 and beyond.

• Sets income tax rate at 4.25% from October 1, 2012 to October 1, 2014; reduces to 4.15% from October 1, 2014 to January 1, 2016; and reduces to 4.05% on and after January 1, 2016.

• Implements automatic rate reduction mechanism beginning October 1, 2017: if individual income tax revenue in the preceding fiscal year increases by at least $300,000,000 and meets or exceeds the inflation rate, the maximum tax rate shall be reduced by 0.1 percentage points.

• Prohibits consecutive year reductions under the automatic mechanism and bases revenue determinations on official economic forecasts from revenue estimating conferences.

• Maintains existing provisions regarding deposit percentages of collected revenues into the state school aid fund and income computation methods for residents, nonresidents, trust beneficiaries, and other taxpayers.