MIDLAND, Mich. — The Michigan Court of Appeals will decide the Mackinac Center for Public Policy’s lawsuit challenging the wrongfully increased income tax rate by March 11, the state Supreme Court announced today. Any appeal to that decision would be due to the Michigan Supreme Court by March 25, 2024.

The Mackinac Center is fighting the Michigan Department of Treasury’s decision to raise the personal income tax rate back to 4.25% in 2024. The rate was lowered to 4.05% last year thanks to a 2015 law that created a tax cut trigger. The trigger automatically lowers taxes when state revenue outpaces inflation by a set amount. The state wrongly asserts that the phrase “current rate” in the law means any income tax reduction would only be for one year — an interpretation at odds with both the clear language of the law and the stated intent of the legislators who wrote it. Any tax cut under this statute is permanent.

The Mackinac Center is representing Associated Builders and Contractors of Michigan, National Federation of Independent Business, Sen. Ed McBroom, Rep. Dale Zorn and six individual taxpayers from across the state.

“This announcement from the Michigan Supreme Court is a significant step toward clarity for Michigan’s 4.9 million taxpayers,” said Patrick J. Wright, vice president for legal affairs at the Mackinac Center. “This illegal tax hike costs taxpayers an additional $714 million a year. The Legislature meant to give permanent tax relief when the state's revenues got extremely high. We hope the courts will agree and recognize the permanence of any tax cuts under this statute."

The Mackinac Center filed a bypass motion to the Michigan Supreme Court last week, along with a brief appealing the Court of Claims’ Dec. 21, 2023, decision.

Learn more about the case here.