Corporate income tax: rate; incremental rollback of rate to 4.25%; provide for. Amends sec. 623 of 1967 PA 281 (MCL 206.623).
HB 4737 would amend Michigan’s Income Tax Act to phase down the state’s corporate income tax rate over several years. The bill keeps the current 6.0% rate in place before October 1, 2025, then reduces it stepwise to 5.5%, 5.25%, 5.0%, 4.75%, 4.5%, and finally 4.25% for business activity on and after October 1, 2030. The measure is framed as an incremental rollback rather than an immediate cut, with the reductions tied to state fiscal years.
The bill also retains and restates the existing corporate income tax base rules, including various additions and deductions for income, losses, royalties, interest, dividends, and related-party intangible expenses. It preserves special treatment for oil and gas income and expenses and for certain mineral income and expenses, and it continues the business loss carryforward rules for up to 10 years. In effect, the bill would lower the tax rate while leaving most of the underlying base-calculation structure intact.
HB 4737 would amend section 623 of the Michigan Income Tax Act, changing the statutory corporate income tax rate schedule and thereby reducing future corporate tax liability for businesses with taxable activity in Michigan. It would not repeal the corporate income tax or broadly rewrite apportionment rules, but it would directly affect the amount owed by corporations and certain flow-through entity owners subject to the tax. The bill would also preserve existing statutory adjustments to the corporate tax base, including related-party expense add-backs, net operating loss treatment, and exclusions for certain oil, gas, and mineral income.
Based on the bill caption and the absence of recorded committee testimony or votes in the provided materials, the bill appears to be presented as a pro-business tax reduction measure. The overall direction is favorable to taxpayers, especially corporations, because it lowers the rate gradually over time. No formal opposition or support is documented in the supplied context, so sentiment can only be inferred from the bill’s tax-cut structure rather than from recorded debate.
The main policy issue is the reduction in corporate tax revenue versus the potential economic benefit of a lower rate. Supporters would likely emphasize competitiveness, business investment, and long-term tax relief, while critics would likely focus on the loss of state revenue and the effect on funding for public services. Another possible point of contention is the phased schedule: some may view the gradual rollback as fiscally cautious, while others may argue it delays relief or does not go far enough. No specific stakeholder positions are recorded in the provided committee or vote history.