April 26, 2012, Introduced by Reps. Nathan and Townsend and referred to the Committee on Tax Policy.
A bill to amend 1964 PA 284, entitled
"City income tax act,"
by amending section 51 of chapter 2 (MCL 141.651), as amended by
1982 PA 124, and by adding section 51a to chapter 2.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
CHAPTER 2
Sec. 51. (1) An employer doing business or maintaining an
establishment within the city shall withhold from each payment to
the employer's employees on and after the effective date of this
ordinance the tax on their compensation subject to the tax, after
giving effect to exemptions, as follows:
(a) Residents.
(i) At a rate equal to the rate set by ordinance to be levied
against resident individuals under this ordinance, but not to
exceed 3%, of all compensation paid to the employee who is a
resident of the city, if the employee is not subject to withholding
in any other city levying the tax.
(ii) At a rate equal to the difference in the percentage rate
of tax on resident individuals as set by ordinance to be levied
under this ordinance less the percentage rate of tax levied by any
other city in which the employee works, on all compensation earned
by the resident in another city.
(b) Nonresidents. At a rate equal to the rate set by ordinance
to be levied under this ordinance on nonresidents but not to exceed
50% of the percentage rate imposed on resident individuals of the
compensation paid to the employee for work done or services
performed in the city designated by the employee as the employee's
predominant place of employment. The withholding rate shall be
applied to the percentage of the employee's total compensation
equal to the employee's estimated percentage of work to be done or
services to be performed in the city for that employer, but no
withholding shall be required if the estimated percentage of work
is less than 25%.
(2) Beginning January 1, 2013, an employer located in this
state that does not do business or maintain an establishment within
a city imposing a tax under a uniform city income tax ordinance but
has an employee who is a resident of a city that imposes a tax
under a uniform city income tax ordinance shall withhold from each
payment to those employees on their compensation subject to the
tax, after giving effect to exemptions, at a rate equal to the rate
set by that ordinance to be levied against resident individuals
under the ordinance, but not to exceed 3%, of all compensation paid
to the employee.
(3) (2)
An employer withholding the tax is
deemed to hold the
tax as a trustee for the city.
(4) (3)
An employer who is required to
withhold and who fails
or refuses to deduct and withhold is liable for the payment of the
amount required to be withheld. The liability shall be discharged
upon payment of the tax by the employee but the employer is not
relieved of penalties and interest provided in this ordinance for
this failure or refusal.
Sec. 51a. Beginning January 1, 2013, every employer in this
state shall require each employee to complete the withholding
certificate described in section 54.