State and Local Tax Facts

MICHIGAN TAXES

• Michigan has very strict limitations on property tax increases, due to the 1978 Headlee amendment and the 1994 Proposal A amendment to the State Constitution.
• Personal income in Michigan is taxed at a flat rate of 4.35% the fifth-lowest income tax rate in the country among states with personal income taxes.
• Michigans 6% sales tax is extremely competitive throughout the Great Lakes region, 1.5 percentage points lower overall than Ohio and 3.25 percentage points lower overall than Illinois.
• Any sales tax increase requires a favorable vote from the citizens of Michigan.  Tax change ballots are held in conjunction with other regularly scheduled elections.
• The state of Michigan and Oakland County are dedicated to ensuring a business-friendly environment, including offering the best tax credits and incentives for both our existing businesses and businesses looking to locate in Oakland County.

LOCAL TAXES

• Michigan has no local sales taxes, which makes Michigans overall sales tax much less burdensome than many other locations throughout the United States.
• Sixty out of sixty-one communities within Oakland County have no local income tax at all; the one that does has a very modest 1% income tax rate for resident workers and a 0.5% income tax rate for nonresident workers.
• Oakland Countys 28 public school districts receive a good portion of their funding directly from the state; however, each district is at least partially funded by local property taxes (called a millage) that are approved by the voters of the district.

- In the 2006/2007 school year, nine out of eleven school millage proposals in Oakland County were passed by district voters.

• Property taxes are paid to the Oakland County Treasurer, who distributes the funds to the state, school districts, County departments, and local communities as prescribed by law.

Source: Michigan Economic Development Corporation, Citizens Research Council of Michigan
Updated: August 2007