Michigan Senate Bill SB0117

Michigan 2025-2026 Regular Session

• Introduced: 3/5/25
• Refer: 3/5/25

Caption

Individual income tax: rate; repeal of the personal income tax; provide for. Amends title & sec. 601 of 1967 PA 281 (MCL 206.601) & repeals pt. 1, pt. 3 & pt. 4 of 1967 PA 281 (MCL 206.1 - 206.532, 206.701 - 206.725 & 206.801 - 206.847).

Summary

SB 117 would substantially restructure Michigan’s Income Tax Act of 1967 by repealing Part 1, Part 3, and Part 4 of the act. Based on the bill caption and the repeal language, the measure is aimed at eliminating the personal income tax framework in those parts of the statute, while leaving Part 2—labeled the “corporate income tax act”—in place. The bill also amends the act’s title and section 601 to preserve the corporate income tax provisions and the general rule that undefined terms in that part follow federal income tax usage. In practical terms, the bill would remove the statutory provisions governing individual income taxation, including related reporting, computation, collection, credits, exemptions, and enforcement provisions contained in the repealed parts. It would leave Michigan with a narrower income tax statute focused on corporate income tax administration and definitions, and would likely require conforming changes elsewhere in state tax law and administrative practice if enacted.

Impact

The bill would repeal major portions of Michigan’s Income Tax Act of 1967, specifically Parts 1, 3, and 4, which are the portions associated with individual income tax and related provisions. That would alter the state’s tax code by removing the legal basis for the personal income tax structure contained in those sections, while preserving the corporate income tax provisions in Part 2 and its federal-reference definition rule. The immediate legal effect would be to eliminate or invalidate the cited statutory provisions, with downstream impacts on tax administration, revenue collection, and any statutes that cross-reference the repealed parts.

Sentiment

The available context does not include committee testimony or recorded votes, so there is no direct evidence of debate or bipartisan support in the materials provided. The bill’s caption and text indicate a strong policy preference for repealing the personal income tax, which suggests the measure is likely to have been viewed favorably by opponents of individual income taxation and unfavorably by those concerned about state revenue stability. Because no vote history or transcript is included, the overall sentiment can only be characterized as a proposal with significant ideological implications rather than one with documented legislative consensus.

Contention

The main point of contention is the repeal of the personal income tax provisions themselves, which would be expected to divide lawmakers and stakeholders between those favoring tax relief and those concerned about the loss of a major state revenue source. Another likely issue is the fiscal and administrative impact on state government, since repealing large portions of the income tax act could affect funding for public services and require substantial conforming legislation. The bill’s preservation of the corporate income tax while repealing the individual income tax framework also creates a policy distinction that may be debated by business, taxpayer, and budget interests.