New Michigan Taxes?

Question

I've been hearing everyone complain about the "new Michigan taxes" but I really don't see what has happened. I know there is something about a 6% sales tax, but nothing else. Could someone explain it (in English, if possible). Thanks!

Answer 1

There are two issues. The first is income tax, the rate has been raised from 3.9% to 4.35% and given immediate effectiveness. See Enrolled Bill 5194.

The second issue is sales tax. The legislature does have authority to raise the sales tax without putting it on the ballot. They DO have the authority to add it to more things. They have passed a bill which as of Dec 1, 2007 will put the 6% sales tax on certain services. Prior to this services were not taxed. The list does NOT include law, accounting, medical services, haircuts, or golf. The list does include items like consulting, skiing, nail care, and a variety of other services. See Enrolled Bill 5198.

Both Bills can be seen in their entirety on the Michigan Legislature site or the Michigan Treasury site now has information posted to help people comply.

Answer 2

From the Michigan Dept. of Treasury Website:

"Income Tax Rate Changed to 4.35% Effective October 1, 2007"

It was 3.9%.