An economic study says the May ballot proposal to raise the state sales tax could also cost Michigan taxpayers $100 million more in federal income taxes.
The Michigan Public Radio Network’s Rick Pluta reports.
The ballot proposal would raise the state sales tax by a penny on the dollar.
The study by the Anderson Economic Group says if it’s adopted, that will trigger changes in other taxes. One of them is the state vehicle registration fee.
Economist Patrick Anderson says, right now, it’s deductible on federal income taxes.
“The proposal would effectively change the auto registration tax from one that is deductible under the federal income tax to one that is not,” he says.
That could make the ballot proposal an even tougher sell to voters. Governor Rick Snyder says it’s necessary to raise more than a billion dollars to fix roads.