Income tax is no small slice of cities’ revenue, so decisions that states, businesses and employees make here have ramifications for cities’ bottom lines. For those that levy the tax, it averages 34 percent of what they take in annually, according to a Citizens Research Council of Michigan report. Cities including Detroit, Flint, Grand Rapids and Ionia that get a substantial chunk more from income taxes than property taxes are likely to experiences those losses more deeply.
It’s possible that some cities may challenge the state’s view in court, arguing that taking work home doesn’t exempt one from taxes. But Michigan collects and administers Detroit’s income taxes, so what the state says goes, Bannasch said.
How much less money cities will collect depends partly on what they’re willing to expend on enforcement, he said. Will they track down companies and employees looking to game the system?
The state says documentation