Cities Push Local Income Tax Mandates on Small Business

Local Income Tax Mandates
on Employers: There are 22 municipalities in Michigan that levy a local
income tax. All of them tax both residents and nonresidents but charge nonresidents
a lower income rate. Legislation has been introduced in both the Senate and the
House that would grant the treasury departments of these cities sweeping powers
to require that employers police their workers to be sure they are paying their
city income taxes. Even businesses that are outside the cities in question
could be subject to audit and penalties if the city believes that they have
workers living within their jurisdiction that are not paying the city income
tax. This is yet another attempt by local governments to mandate record keeping
and enforcement obligations on employers to make them nannies for local tax
collectors. NFIB will be working to defeat Senate Bill 1127 and House Bill 4829
in the lame duck session.