: Many of your classmates will begin their payroll career in a Michigan based company, sometimes located in a city that imposes local income taxes. Local income taxes are taxes on the income earned within the city limits, with Detroit, Jackson, Lansing, and Port Huron being some of the largest cities in Michigan to impose a local income tax. Most cities have different rates for resident and non-resident employees that work within the city limits. However, companies are not usually legally required to withhold these local income taxes from the employee paychecks like they are with federal and state income taxes.

Questions to be Answered: 1) What is one advantage from the employers perspective on not being legally required to withhold local income taxes from employees paychecks?

2) What is one disadvantage from the employers perspective on not being legally required to withhold local income taxes from employees paychecks?