NFIB Michigan State Director Amanda Fisher testified today before the Michigan House Finance Committee in support of House Bill 4170, legislation that provides for an income tax rate rollback from 4.25% to 4.05% and clarifies the ongoing permanency of any future reductions.

In 2015, the legislature made provisions that if there were ongoing budget surpluses exceeding inflation, there would be a permanent reduction in the income tax rate commensurate with the revenue growth. The rate reduction was triggered in 2023, but unfortunately, the Governor and legislative majorities chose to challenge the permanent nature of the income tax rollback. In August 2023, NFIB filed litigation with the Mackinac Center for Public Policy and others arguing that the 2023 income tax cut should remain permanent.

“Most of our small business members are organized as “pass-through” businesses, meaning their business income is paid at the Michigan income tax rate,” said Amanda Fisher, NFIB Michigan State Director. “By not recognizing the permanency of the rate change, the Governor and legislature essentially gave small businesses and citizens a tax hike. This legislation would restore the tax reduction that taxpayers of Michigan were promised in the 2015 legislation.

“We’re thankful to bill sponsor Rep. Kathy Schmaltz (R-46) and members of the House Finance Committee for prioritizing this legislation, and we are hopeful that the Michigan Legislature will pass this important legislation for Main Street.”

NFIB recently issued its 2025 Main Street Agenda, which included the restoration of the income tax reduction. Tax-related issues including “state taxes on business income” are one of the top issues facing small businesses nationwide, according to NFIB’s Problems and Priorities survey.