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In an effort to streamline and modernize Michigan's taxation system, the state Senate has passed a comprehensive tax reform bill on Tuesday, March 22, 2026. The bill, which has been in the works for months, aims to make the state's tax code more efficient, fair, and competitive.One of the key provisions of the bill is a reduction in the personal income tax rate from 4.25% to 3.9%. This tax cut is expected to put more money back in the pockets of Michigan residents, stimulating consumer spending and boosting the state's economy. Additionally, the bill includes an increase in the Earned Income Tax Credit, providing further relief to low- and middle-income families.In order to offset the revenue loss from the income tax cuts, the bill also includes measures to broaden the sales tax base. This includes extending the sales tax to certain services that were previously exempt, such as personal training, landscaping, and dry cleaning. The bill also includes a provision to collect sales tax from online retailers, leveling the playing field for brick-and-mortar businesses in the state.Another key component of the bill is a restructuring of the corporate tax system. The bill reduces the corporate tax rate from 6.2% to 5.9% and eliminates various tax deductions and credits that were seen as loopholes by many lawmakers. This move is expected to make Michigan more attractive to businesses looking to invest and create jobs in the state.Supporters of the bill argue that these tax reforms will make Michigan more competitive with neighboring states and attract businesses and residents to the state. However, critics of the bill have raised concerns about the impact of the sales tax expansion on lower-income families and the potential for unintended consequences.The bill will now move to the state House of Representatives for consideration. If passed, the new tax laws are expected to go into effect on January 1, 2027. Stay tuned for more updates on this developing story.