MSC will review pension tax law

The Michigan Supreme Court has granted Gov. Rick Snyder’s request for an advisory opinion on the constitutionality of reducing or eliminating tax exemptions for pension incomes.

The MSC will hearing arguments on the constitutionality of 2011 PA 38 on Sept. 7.

The questions submitted for the MSC’s review are:

  • (1) whether reducing or eliminating the statutory exemption for public-pension incomes as described in MCL 206.30, as amended, impairs accrued financial benefits of a “pension plan [or] retirement system of the state [or] its political subdivisions’ under Const 1963, art 9, § 24;
  • (2) whether reducing or eliminating the statutory tax exemption for pension incomes, as described in MCL 206.30, as amended, impairs a contract obligation in violation of Const 1963, art 1, § 10 or the US Const, art I, § 10(1);
  • (3) whether determining eligibility for income-tax exemptions on the basis of total household resources, or age and total household resources, as described in MCL 206.30(7) and (9), as amended, creates a graduated income tax in violation of Const 1963, art 9, § 7; and
  • (4) whether determining eligibility for income-tax exemptions on the basis of date of birth, as described in MCL 206.30(9), as amended, violates equal protection of the law under Const 1963, art 1, § 2 or the Fourteenth Amendment of the United States Constitution.

The Attorney General will submit separate briefs arguing for and against the legislation’s constitutionality.

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