LANSING, Mich. — State Sen. Jack Brandenburg, R-Harrison Township, introduced legislation on Thursday that would restore the Michigan personal tax exemption that was lost in the recent federal tax reform.
Without Senate Bill 748, Michigan families would be hit with a tax hike of nearly $1.5 billion.
“It’s been my main priority in Lansing to fight for tax relief for Michigan families,” Brandenburg said. “President Trump went big and bold in his tax relief for American families and it is time we do the same for families here in Michigan.
“My plan to increase the personal exemption to $4,800 will provide meaningful relief to taxpayers in our state, while being responsible with our state tax dollars.”
Sen. Brandenburg’s legislation makes necessary changes to maintain the state’s personal exemption and provides an increase in the state personal exemption by $500 to $4,800 by 2021, while remaining tied to inflation. Currently, the state personal tax exemption is scheduled to increase from $4,000 to $4,300 over the next three years.
“The governor’s plan to increase the personal exemption to $4,500 was a good start, but I believe we need to go further in a responsible way to provide real tax relief for Michigan families,” Brandenburg said. “That’s why my plan would more than double the savings a family of four would realize in their tax returns from the personal exemption compared to the $4,500 proposal offered by the Governor.”
The federal Tax Cut and Jobs Act, in addition to lowering income tax rates, included a streamlined exemption process that eliminated the $4,050 personal exemption at the federal level, setting it to zero.
Michigan’s current state income tax law ties Michigan personal exemptions to the federal number of exemptions. Without a revision to the law, Michigan taxpayers would no longer be able to claim the personal exemptions on their state taxes. This would cost state taxpayers around $1.5 billion a year.
“The federal tax reform package was a big win for our country,” Brandenburg said. “Now I’m leading the reforms here in Michigan to adjust for the new law and to make sure Michigan families have tax relief on all levels. My plan is to take quick action so that Michigan taxpayers don’t face any tax hikes.”
The Senate Finance Committee will hold a hearing on SB 748 on Tuesday, Jan. 16.