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Michigan sets January takeover for Detroit income tax collections

(Reuters) – Michigan will begin processing individual income taxes owed to Detroit starting in January in an effort to boost collections and efficiency, city and state officials said on Tuesday.

Detroit, which exited the biggest-ever U.S. municipal bankruptcy last December, included the transition to state processing of the tax starting with the 2015 tax year in its post-bankruptcy plan.

City residents and non-residents subject to the income tax will be able to file city tax returns electronically for the first time.

“More efficient tax collection also means the city will have more resources to provide vital services to our citizens.” said Detroit Chief Financial Officer John Hill in a statement.

Income taxes are Detroit’s biggest tax revenue source, totaling nearly $254 million in fiscal 2014, according to the city’s latest financial audit. Last month, the city sold $245 million of bonds backed by income tax revenue. (Reporting By Karen Pierog; Editing by Christian Plumb)

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