At Governor Snyder's request, on Friday, November 18, 2011, the Michigan Supreme Court issued an advisory ruling as to the new amendments to the Michigan Income Tax Act, which go into effect on January 1, 2012:

• The Supreme Court ruled that reducing or eliminating the exemption for public pension incomes (MCL 206.30) does not impair the accrued financial benefits of a pension plan of the state or political subdivisions and does not impair a contractual obligation; and, therefore, does notviolate the Michigan or U.S. Constitution.

• The Supreme Court ruled that determining eligibility for income tax exemptions on the basis of date of birth (MCL 206.30(9)) does not violate the Michigan or U.S. Constitution.

BUT,

• The Supreme Court ruled that determining eligibility for income tax exemptions and deductions on the basis of total household resources (MCL 206.30(7) and (9)) does create a graduated income tax and, therefore, does violate the Michigan Constitution.

The Supreme Court held that the unconstitutional portion of the Income Tax Act can be severed, leaving the rest of the amendments intact and in effect as of January 1.

Click here for the complete Supreme Court Opinion.