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Michigan Business Tax Adjustment Act of 2025

This bill amends the Michigan Business Tax Act to modify the business income tax rate and provide options for taxpayers with certain credits. Specifically, the bill changes the business income tax rate from 4.95% to 30% for all business activity occurring on or after January 1, 2025. For taxpayers with certificated credits who previously elected to file under the Michigan Business Tax Act, the bill now allows them to switch to filing under the Corporate Income Tax Act starting in tax years beginning after December 31, 2024. This means businesses with existing credits can choose to continue using those credits under the new tax structure. The bill also includes detailed provisions about how these changes will affect various types of taxpayers, including those with affordable housing projects, flow-through entities, and businesses with specific types of tax credits. The changes are part of a broader set of legislative bills that must all be enacted for this bill to take effect, indicating it is part of a comprehensive tax reform package.1