House bill would ban city income tax for non-residents

LANSING, Mich. (WILX) - People who work in Lansing, but live somewhere else, might not be paying the city’s income tax for much longer. The same goes for Jackson and East Lansing. A bill in the state house would limit city income taxes to people who live within the city limits.

Supporters of this bill say they get taxed enough where they live, and shouldn’t have to pay an additional tax just to go to work.

“You’re contributing to the community by working in the community but you’re not there all the time, a majority of the cities in Michigan don’t have an income tax and they make it work,” Said Brown City resident, Matt Muxlow.

The bill’s supporters in the state house believe if you can’t vote in a city you shouldn’t be required to pay taxes there.

“People being present in the city generates revenue, it was simply based on the fact that its taxation without representation,” Representative Pamela Hornberger said.

“You have no say in because you don’t live there and you don’t have a vote and this legislation is an important step to fix that,” Representative Steven Johnson said.

But cities that have an income tax will lose a lot of money if they can’t charge workers who live elsewhere.

“We estimated last fall as much as 250 million dollars was going to be hit from those 24 cities budgets right now so that’s a real concern for those communities,” Said Director of State and Federal Affairs for the Michigan Municipal League, Chris Hackbarth.

Local governments point out the state has been cutting revenue sharing for years and this bill will leave them in even worse financial position.

“It’s probably the worst possible time because of the pandemic because you are already seeing those communities taking a hit right now in their budget,”

The city of Jackson told me any change to how it collects income tax would have a huge impact on what services it can offer.

A spokesman tells me people who work in the city but don’t live there still use public infrastructure and city services so it’s only fair to ask them to help pay for it.

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