MI HB5667

Changes the income tax rate effective January 1, 2024 to 4.05%, down from the previous 4.25% rate that applied from October 1, 2012.

Establishes an automatic rate reduction mechanism beginning January 1, 2024 if general fund revenue growth exceeds inflation in any year; the rate must be reduced based on a formula comparing actual revenue to capped revenue.

Modifies school aid fund distributions, establishing new percentages for fiscal years 2024-2026 and a permanent 1.040% allocation beginning October 1, 2026.

Replaces legislative language from "shall" to "must" throughout the statute for clarity and consistency.

Includes enacting language clarifying that the bill corrects a misinterpretation of prior legislative intent and expresses that the original legislative intent was to create a permanent rate reduction.