The State Tax Commission announced the 2022 inflation rate multiplier to be used in the capped value formula and for the Headlee Millage Reduction Fraction formula. For the coming year, that inflation value is set at 3.3%. This is the highest inflation value since 2009.
According to the Treasury bulletin:
Inflation Rate Multiplier (IRM) Used in the 2022 Capped Value Formula
The inflation rate, expressed as a multiplier, to be used in the 2022 Capped Value Formula is 1.033.
2022 CAPPED VALUE = (2021 Taxable Value – LOSSES) X 1.033 + ADDITIONS
• The formula above does not include 1.05 because the inflation rate multiplier of 1.033
is lower than 1.05.
Inflation Rate Multiplier Used in 2022 “Headlee” Calculations
The inflation rate multiplier of 1.033 shall also be used in the calculation of the 2022
“Headlee” Millage Reduction Fraction required by Michigan Compiled Law (MCL) 211.34d.
The formula for calculating the 2022 “Headlee” Millage Reduction Fraction (MRF) is:
2022 MRF = (2021 Taxable Value – LOSSES) X 1.033
2022 Taxable Value – ADDITIONS
Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and [email protected].