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Michigan lawmakers debate banning city income tax for non-resident workers

24 cities collect income tax, Detroit collects the most at 1.2%

LANSING, Mich. – Twenty-four communities across Michigan collect income tax from people who work in the city but live elsewhere.

Detroit collects the most of non-resident workers at 1.2%. A bill in front of a state House committee would end that practice.

“I call it the no taxation without representation bill,” Rep. Pam Hornberger (R-Chesterfield) told the committee.

Hornberger is the sponsor of the bill.

However, the Michigan Municipal League and others strongly oppose.

Chris Hackbarth from the Michigan Municipal League told the committee that taxing non-resident workers is a revenue stream these cities rely on to make ends meet.

The city of Detroit lost out on $23 million worth of revenue last year from non-resident workers who were working from home and not their city offices.

“I’ve had cities across the state come to me as chair of the tax policy committee because they’ve seen more and more employees going to remote work,” said Rep. Matt Hall (R-Marshall).

Workers can try to recoup some of those tax dollars when they file by proving they spend time outside of the city. Hornberger doesn’t believe cities should be able to put income taxes on people who have no say on how those cities are run.

“You have absolutely no representation, you have no say and yet you’re being taxed simply based on you work in that city,” she said.