Michigan House Bill HB6105

Michigan 2023-2024 Regular Session

• Introduced: 11/13/24
• Refer: 11/13/24

Caption

Corporate income tax: rate; increasing of rate and revising the distribution of revenue collected; provide for. Amends secs. 623 & 695 of 1967 PA 281 (MCL 206.623 & 206.695).

Impact

This legislative proposal is likely to create significant shifts in Michigan’s corporate tax landscape. By increasing the tax rate, the bill seeks to bolster state revenues which could fund various public services and projects. The anticipated increase in revenue is earmarked for general funds, which will have implications for fiscal planning including potential increases in public investment in infrastructure and social programs. However, the increase in tax rates may be met with resistance from business owners and advocacy groups concerned about the potential for adverse effects on business operations and economic competitiveness.

Summary

House Bill 6105 proposes amendments to Michigan's Income Tax Act to adjust the corporate income tax rate. Currently, the corporate tax rate stands at 6.0% and is set to increase to 10.0% starting October 1, 2025. The bill aims to refine how corporate income is taxed based on business activity within Michigan, impacting a wide range of businesses operating in the state or with beneficial interests in flow-through entities. This adjustment reflects an ongoing effort to enhance state revenue through corporate taxation, addressing both historical tax rates and anticipated fiscal needs of the state as it prepares for future budget requirements.

Contention

Notable points of contention around HB 6105 revolve primarily around the anticipated economic impact of raising the corporate tax rate. Proponents argue that the revenue generated will support essential state functions and long-term developmental goals, while opponents contend that higher taxes could lead to business exodus or reduced investment in Michigan's economy. Additionally, discussions within legislative committees might highlight diverse perspectives on fairness in taxation, specifically how increased corporate taxes could affect small vs. large businesses, thereby influencing the competitive balance within the local economy.