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Act 284 of 1964

AN ACT to permit the imposition and collection by cities of an excise tax levied on or measured by income; to permit the collection and administration of the tax by the state; to provide the procedure including referendums for, and to require the adoption of a prescribed uniform city income tax ordinance by cities desiring to impose and collect such a tax; to limit the imposition and collection by cities and villages of excise taxes levied on or measured by income; to prescribe the powers and duties of certain state and municipal agencies, departments, and officials; to establish the city income tax trust fund; and to provide for appeals.

History: 1964, Act 284, Imd. Eff. June 12, 1964;--Am. 1996, Act 478, Eff. Jan. 1, 1996.

The People of the State of Michigan enact:

Chapters:


Chapter 1

General Provisions

141.501 City income tax act; short title.

Sec. 1. This act shall be known and may be cited as the "city income tax act".

History: 1964, Act 284, Imd. Eff. June 12, 1964.

141.502 Income tax; prohibited to villages; uniform city income tax ordinance; prior ordinance.

Sec. 2. No village shall impose and collect any excise tax levied on or measured by income after January 1, 1964. Except as otherwise provided in this section, no city shall impose an excise tax levied on or measured by income until the lawful adoption by the city of the entire uniform city income tax ordinance as hereinafter set forth. No city shall impose and collect such an excise tax prior to January 1, 1965, except that a city which on January 1, 1964 had in effect a valid ordinance levying and imposing such an excise tax may continue to levy and impose the tax under such ordinance until the uniform city income tax ordinance becomes effective in such city, but in no case shall such ordinance or any other income tax ordinance, in effect in such city prior to the effective date of the uniform city income tax ordinance, continue in effect later than December 31, 1964. The enforcement, collection and refund provisions with respect to liabilities incurred under such prior income tax ordinance shall continue in effect for the period provided for in such prior ordinance.

History: 1964, Act 284, lmd. Eff. June 12, 1964.

141.502a Imposition of excise tax; condition.

Sec. 2a. Beginning January 1, 1995, a city shall not impose an excise tax on income under this act unless at least 1 of the following applies:

(a) The city had in effect on January 1, 1995 an excise tax on income under this act.

(b) The imposition of an excise tax on income under this act is approved by the qualified and registered electors of the city.

History: Add. 1995, Act 234, Imd. Eff. Dec. 19, 1995.

141.503 Excise tax on income; levy, assessment, and collection; rates; adoption, rescission, or amendment of uniform city income tax ordinance; petitions for referendum election; submitting question to city electors; election procedures; effective date of ordinance; delay; applicability; end of tax year; city of more than 1,000,000 population; effective date of ordinance amendment increasing tax; conditions; total estimated expenditures not to exceed total estimated revenues.

Sec. 3. (1) The governing body of a city, by a lawfully adopted ordinance that incorporates by reference the uniform city income tax ordinance set forth in chapter 2, may levy, assess, and collect an excise tax on income as provided in the ordinance. The ordinance shall state the rate of the tax which shall be the rate authorized by 1 of the following:

(a) The uniform city income tax ordinance under section 11 of chapter 2.

(b) Subsection (2).

(c) Section 3a, 3b, or 3c of this chapter.

(2) In a city with a population of more than 1000,000, the governing body may levy and collect a tax at a rate to be determined from time to time, that rate to be not more than 2% on corporations, not more than 3% on resident individuals, and not more than 1-1/2% on nonresident individuals but not to exceed 1/2 of the tax rate imposed on resident individuals.

(3) The governing body of a city may adopt the uniform city income tax ordinance with the alternative sections as set forth in chapter 3 instead of the similarly numbered sections as set forth in chapter 2. The uniform city income tax ordinance may be lawfully adopted or rescinded by the governing body at any time. The adoption of an ordinance is effective on and after January 1 or July 1 following adoption of the ordinance, as specified in the ordinance, but an ordinance shall not become effective earlier than 45 days after adoption or until approved by the electors if a referendum petition is filed as authorized in this act or a referendum is otherwise required. The rescission of an ordinance shall become effective on the following December 31. The ordinance may be rescinded at any time by the governing body in the same manner in which it was adopted and with appropriate enforcement, collection, and refund provisions with respect to liabilities incurred prior to the effective date of its rescission. The ordinance shall not be amended except as provided by the legislature. A city may amend the ordinance to change the tax rate to a rate authorized by this act.

(4) Petitions for a referendum election on the question of adopting an ordinance adopted by the governing body may be filed with the city clerk not later than the sixth Monday following the adoption of the ordinance. The petitions shall be signed by a number of registered electors of the city equal to at least 10%, but not more than 20%, of the registered electors of the city voting in the last general municipal election prior to the adoption of the ordinance by the governing body. If proper petitions are filed, the question of adopting the ordinance shall be submitted by the governing body to the city electors at the next primary or general election or at a special election called for the purpose, in any case held not less than 45 days nor more than 90 days after the clerk has reported the filing of the referendum petition to the city's governing body. The checking of names on the petitions, the counting, canvassing, and return of the votes on the question, and other procedures for the election shall be as provided by law or charter. Upon a favorable vote of the city electors, the ordinance shall be effective as specified in the ordinance which may be amended by the governing body of the city following the election to specify July 1 or January 1 as the effective date of the ordinance, if the effective date originally specified in the ordinance is considered impractical or inconvenient for any reason. The provisions in this section for a referendum election, and for delaying the effective date of the ordinance if petitions for a referendum are filed, are not applicable to a city that on January 1, 1964 had in effect a valid ordinance levying and imposing an excise tax levied on or measured by income. Notwithstanding any other provision of this act, if an ordinance becomes effective on any date other than January 1, each tax year shall end on December 31, and the provisions of the ordinance based on a full tax year are modified accordingly to be applicable to the partial tax year.

(5) For cities with a population of more than 1,000,000, an amendment to the ordinance to increase the rate of tax levied above that in effect for the 1980 tax year shall become effective on and after the first day of the month in which all of the following conditions prevail or, if all the fo


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