Whitmer Vetoes Income Tax Cuts, Will Veto Gas Tax Pause  

Whitmer Vetoes Income Tax Cuts

Last Friday, March 18th, Governor Whitmer vetoed a bill that would lower Michigan’s income tax rate, as well as raise exemptions for retirement income and reinstate a per-child tax credit.  

At the beginning of the month, the legislature passed Senator Aric Nesbitt’s SB 768. This sweeping tax cut proposal lowered the state’s income tax rate from 4.5% to 3.9%. The plan also doubled the exemption allowance for retirement income from $20,000 to $40,000 and reinstated a $500 per-child tax credit.  

In an original plan, this bill also lowered the corporate tax rate from 6% to 3.9%, however, that did not make it in the final plan that was sent to the Governor. The House and Senate each originally had their own plans and came together on this compromise.  

Also last week, the legislature passed a 6-month pause on Michigan’s imposed Gas Tax, halting collection of the 27.2 cent per-gallon tax. The bill has not officially reached the Governor’s desk. However, she has indicated she will veto the bill. The Governor has stated that she is supportive of removing the 6% sales tax on gas, but not removing the flat per-gallon 27.2 cent tax. Both are currently applied to gasoline in Michigan. 

Moving forward, it’s unknown what trajectory the negotiations will take. Governor Whitmer has specific spending plans that she would like to see move forward, while the legislature is eyeing broad, sweeping tax cuts.

The Grand Rapids Chamber has been supportive in concept and supports conversations of lowering taxes but would like to do so in a manner that is fiscally responsible, sustainable and provides taxpayers with the most benefit.   

As the legislature and Governor continue to negotiate a budget, your Government Affairs team at the Chamber will be sure to keep you up to speed.

Get involved by joining our Tax and Regulatory Affairs Committee. Contact Nate Henschel at 



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