News Story

Nessel distances self from AG opinion in lawsuit response

AG argues that the interpretation driving Michigan tax law is “not at issue” in suit

In March, State Treasurer Rachael Eubanks requested an attorney general’s opinion on the 2023 tax cut, and whether it was permanent or event-driven. The very next day, Attorney General Dana Nessel responded, arguing that the tax cut is event-driven.

But in a response this week to the Mackinac Center’s lawsuit over the 2015 tax law, the attorney general’s office distanced itself from the opinion that drives the treasury’s interpretation.

“Plaintiffs’ focus concerning the interpretation of the statute centers on their arguments why the Attorney General’s opinion is incorrect,” reads the Nessel response. “Those arguments are largely misplaced because the correctness of the Attorney General’s opinion is not at issue in this case.”

Attorney general’s opinions are treated akin to law by state departments such as the treasury. When 2024 Michigan income tax forms go out, they quote the 4.25% tax rate of past years, not the 4.05% tax rate of 2023.

“Faced with the possibility of a permanent reduction in the tax rate, Gov. Whitmer and Democratic state lawmakers attempted to back-spend nearly $700 million,” explains the Mackinac Center Legal Foundation. “After a failed attempt to spend the money on corporate welfare projects, they announced their plan to provide $180 ‘inflation relief checks’ to each Michigan household. These bills lacked the support needed to take immediate effect, which was required to prevent the tax cut. Whitmer ended up cancelling the checks and accepting the rest of the legislature’s tax plan on March 1 — including the new 4.05% income tax rate.”

That’s when Eubanks, a Whitmer appointee, requested the AG opinion from Nessel. 

At issue is about $700 million.

The Mackinac Center is joined in the lawsuit by two lawmakers who were serving in 2015 and now, Sen. Ed McBroom, R-Vulcan, and Rep. Dale Zorn, R-Onsted, along with Associated Builders and Contractors of Michigan, the National Federation of Independent Businesses, and six individual residents: Barbara Carter, Kimberly Davies, Rodney Davies, William Lubaway, Owen Pyle, and Ross Vander Klok.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.