MI HB4037

Reduces Michigan's individual income tax rate from 4.25% to 4.15% effective January 1, 2023, with subsequent annual reductions to 4.05% (2024), 3.95% (2025), and 3.9% (2026).

Establishes that the 3.9% rate becomes permanent beginning January 1, 2026, unless revenue growth exceeds inflation in which case the rate is further reduced based on a formula comparing general fund revenues to a capped baseline.

Moves the annual revenue-based tax rate adjustment trigger from January 1, 2023 to January 1, 2027, delaying automatic reductions tied to inflation rates and general fund revenue growth.

Requires the state treasurer, Senate Fiscal Agency director, and House Fiscal Agency director to determine rate adjustments by the January revenue estimating conference each year, using the Consumer Price Index and comprehensive annual financial reports.

Maintains existing provisions for school aid fund deposits (1.012% of gross collections) and distributions to the agricultural preservation and renew Michigan funds.