2007 House Bill 5105 (Repeal Detroit income tax reduction law )

Public Act 209 of 2007

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• Introduced by Rep. Steve Tobocman on August 8, 2007, to repeal a law that requires Detroit to gradually reduce its city income tax to 2.0 percent for residents and 1.0 percent for non-residents who work in the city. The law lets Detroit postpone annual one-tenth of a percent reductions if certain conditions apply, which has been the case since 2004, but will not apply this year. Under the bill Detroit’s income tax would remain at 2.5 percent for residents and 1.25 percent for non-residents who work in the city.
  • Referred to the House Tax Policy Committee on August 8, 2007.
    • Reported in the House on September 5, 2007, without amendment and with the recommendation that the bill pass.
  • Amendment offered by Rep. Phil Pavlov on September 25, 2007, to only allow cities to levy an income tax if they do not pass or enforce an ordinance or regulation that prohibits local officials and peace officers from cooperating with federal immigration authorities in matters "concerning the immigration status" of a resident alien. Although the amendment passed, its provisions were not included in the Gaffney substitute that was subsequently adopted, and so is not in the House-passed version of the bill. The amendment passed in the House by voice vote on September 25, 2007.
  • Substitute offered by Rep. Edward Gaffney on September 25, 2007, to replace the previous version of the bill with one that repeals the requirement that Detroit must lower its city income tax, and allows the city to impose a 3 percent rax on residents, and 1.5 percent on nonresidents who work there. The substitute passed in the House (70 to 39) on September 25, 2007. [Vote Details and Comments]
• Passed in the House (73 to 35) on October 3, 2007, to repeal a law that requires Detroit to gradually reduce its city income tax to 2.0 percent for residents and 1.0 percent for non-residents who work in the city. The law lets Detroit postpone annual one-tenth of a percent reductions if certain conditions apply, which has been the case since 2004, but will not apply this year. Under the bill Detroit may levy an income tax allowed of 3 percent rax on residents, and 1.5 percent on nonresidents who work there. [Vote Details and Comments]
• Received in the Senate on October 9, 2007.
  • Referred to the Senate Finance Committee on October 9, 2007.
  • Substitute offered in the Senate on December 13, 2007, to replace the previous version of the bill with one that does not freeze Detroit's income tax rate at 2.5 percent, but does suspend for two years the mandated gradual reductions in the rate. The substitute passed in the Senate by voice vote on December 13, 2007.
• Passed in the Senate (32 to 4) on December 13, 2007, to suspend for two years a law that requires Detroit to gradually reduce its city income tax to 2.0 percent for residents and 1.0 percent for non-residents who work in the city. [Vote Details and Comments]
• Received in the House on December 13, 2007, to concur with the Senate-passed version of the bill. Passed in the House (65 to 42) on December 13, 2007. [Vote Details and Comments]
• Signed by Gov. Jennifer Granholm on December 27, 2007.

Comments

Introduced by Rep. Steve Tobocman on August 8, 2007. Passed in the House (73 to 35) on October 3, 2007. New Comment