University of Michigan Gateway Ford School

Regional Tax Authority in the State of Michigan

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April 2017

Karen Seo

Abstract

Michigan, like many other states, holds final authority over tax policy in the state. In Michigan, the authority to levy local taxes is granted by the State. The State defines a set of regulations and restrictions that local municipalities must follow in their execution of tax collection. The State defines the base upon which the tax is levied, the maximum tax rate, and the types of local governments that may actually levy tax. In some cases, the State even determines what the tax revenues must be used for1.Regional tax authority is not permitted by the State constitution. Regional taxes are taxes, fees, assessments that apply uniformly across a membership of local municipalities. If a region, which is a collective group of multiple jurisdictions, of the state is granted regional tax authority, it may implement its own structure of tax policy unique to other regions or. In many cases, regional taxation is utilized to fund some kind of widescope public good or service. Michigan has a history of struggling with the formulation and execution of tax policy, but granting local jurisdictions with regional tax authority will help spur greater economic development and fiscal equity in Michigan.

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