Tax Structure
Michigan’s tax structure traditionally relies on property taxes to fund schools, townships, villages, cities, counties, community colleges and libraries. In 1994 Michigan voters approved Proposal A, changing the Michigan Constitution and granting the following tax changes:
-
Added an extra 2% on sales and use taxes (from 4% to 6%), dedicating additional revenues to schools
- Exempted eligible homeowners from paying local school operating taxes on their homes
-
Limited yearly increases in taxable value by the inflation rate (Consumer Price Index) or 5%
- When property is sold or transferred, adjust its taxable value to 50% of its market value