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Detroit committee hears revenue estimates and legal hurdles for local sales and admissions taxes
Summary
City experts told Detroit’s Committee of the Whole that a 1% local sales tax could raise roughly $72 million a year and that an admissions (ticket) excise tax could raise an estimated $14 million–$50 million, but both options would require state action and further study on equity and administration.
Members of Detroit’s City Council heard an hourlong briefing and follow-up discussion on options for a local option sales tax and an admissions (ticket) excise tax at a Committee of the Whole meeting.
The Citizens Research Council of Michigan told council members the city’s tax base leans heavily on income and property taxes and that consumption-based taxes are limited in Michigan. Madhu Anderson, a CRC revenue associate, said the council asked CRC to estimate how much revenue a local sales tax might generate; CRC’s best estimate, using household expenditure proxies and censored public data, was roughly $72,000,000 a year for a 1% local sales tax in Detroit. CRC president Eric Looper (introduced by LPD) said an admissions excise tax—applied to tickets for major events—typically raises less revenue but can be dedicated to a specific purpose. CRC reported peer-city admissions levies between about 3% and 10% and…
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