Michigan’s new tax cuts
Michigan has replaced the Michigan Business Tax (MBT) effective January 1, 2012 with a new, simpler and more competitive corporate income tax.
- Low tax rates have been established in Michigan. The new structure taxes C-Corporations at 6% on federal taxable income apportioned to Michigan. Other entities – individuals, partnerships, LLCs, etc. – have income flow to their personal income tax. The personal income tax rate will remain 4.35%, dropping to 4.25% in 2013.
- The change reduces business taxes by an estimated 86%. All industries are in line for significant tax cuts, thus reducing operational costs and encouraging new investment in the state.
- Michigan’s overall business tax climate ranking is now 12th in the U.S., according to the Tax Foundation. In isolating the corporate tax rankings, the Foundation’s Michigan ranking jumps to 7th from the previous level of 49th.
The new, simplified tax system provides a significant broad-based reduction in business taxes and eliminates a laundry list of credits and deductions previously included in the MBT. Furthermore, the alternative business income tax for small business remains intact and other economic development tools are still available.
What others are saying about Michigan’s new tax system:
Starting in 2014, Michigan will begin phasing out its Personal Property Tax (PPT) for some commercial or industrial property and eligible manufacturing personal property. The PPT phase-out is contingent upon voter approval in the August 2014 election. For more information on the PPT phase-out,
click here.
