Action seeking declaratory & mandamus relief as to the Michigan income tax rate; MCL 206.51(1); “If” & “current rate”; Subject-matter jurisdiction; MCL 205.22(1); Standing; Ripeness

The court held that the trial court did not err by granting defendant-State Treasurer summary disposition of plaintiffs' claims related to the Michigan income tax rate, by denying their countermotion for summary disposition, or by denying their motion for a show cause order. Plaintiffs (advocacy groups, legislators, and individual taxpayers) claimed that in light of the reduction of the rate from 4.25% to 4.05% for tax year 2023, the income tax rate is now capped at 4.05% unless or until the Legislature modifies it. The trial court rejected their position and agreed with defendant that 4.25% remains the default rate, subject to a possible reduction each year based on certain economic conditions that statutorily trigger a reduction. On appeal, the court first found it had subject-matter jurisdiction, noting plaintiffs “were not subject to the time restrictions set forth in MCL 205.22(1) because they were not appealing an assessment, decision, or order of the Department of Treasury.” In addition, given “defendant’s effective concession that individual taxpayer-plaintiffs have standing, we need not determine whether legislator-plaintiffs and advocacy group-plaintiffs have standing.” Further, in light of the Department of Treasury’s determination “that the conditions for reducing the rate under MCL 206.51(1)(c) have not been satisfied for the 2024” tax year, plaintiffs’ claims did “not rest on contingent future events or a hypothetical” controversy, and the case was ripe for adjudication. Turning to the merits, the court rejected plaintiffs’ argument that the reduction of the income tax rate to 4.05% under MCL 206.51(1)(c) for the 2023 tax year has created a permanent cap on the rate for subsequent tax years. “[T]he statute contains no language indicating a legislative intent to make the rate reduction under Subsection (1)(c) permanent. Defendant’s interpretation would make each reduction permanent and allow compounding reductions that could ultimately result in no income tax. This would render nugatory the statutory language providing for an income tax.” Plaintiffs suggested that “recognizing this possible effect of compounding reductions amounts to making a policy argument in favor of an income tax. They note that Michigan did not have a broad-based income tax until 1967 and that some states currently do not have” one. The court expressed no view as to “what is an appropriate policy on income taxation. Our analysis is based on the statutory text rather than policy considerations. As part of our textual analysis, we note that the statute contains language providing for an income tax and that defendant’s interpretation has the potential to render this language nugatory.” Finally, because “the statute is unambiguous, there is no need to consult legislative history.” Affirmed.