Legislation was introduced in the 2015-2016 legislative session that would require employers who are not located in a city with an income tax to withhold local city income taxes on behalf of employees who reside in a city with a tax but commute to a suburban or out-state employer. These types of proposals are fraught with peril for employers. Mandating “commuter withholding” would pose unfair administrative burdens on employers who are not in a city and could result in a reluctance to hire commuting city residents.
Where We Stand:
The Michigan Chamber opposes mandates on job providers to collect city income taxes for municipalities from which they receive no services. If city residents are illegally evading city income taxes, the primary focus should be on more stringent enforcement against those individuals.