Lansing — Michigan is focusing a disproportionate share of its auditing resources on in-state taxpayers rather than out-of-state big box stores, franchises and chains that historically have supplied a majority of tax revenue for the state, two whistleblowers told state lawmakers Tuesday.
In 2022, out-of-state sales, use and corporate income tax revenue — largely assessed on multistate corporations that have a presence in Michigan, but headquartered out of state — totaled about $7.1 billion, while in-state taxpayers contributed about $6.1 billion that same year, said Clay Cornelius, the Treasury Department's state assistant administrator who spoke as a concerned taxpayer and employee.
Despite out-of-state taxpayers historically contributing the majority of tax revenue, out-state auditing operations for Michigan have been under "serious erosion," Cornelius told the House Oversight Committee on Tuesday. In 2025, Treasury had just eight auditors and audit specialists assigned to out-of-state audits compared to the roughly 119 assigned to in-state audits, according to Treasury data.
In 2019, Treasury employed 28 out-of-state auditors and audit specialists.
"We’re talking about money coming in from out-state," Cornelius said. "If that money declines, who’s going to carry that burden? In-state. The businesses in-state, the citizens in-state are going to carry that burden.”
Sean Lowery, a former team manager for Michigan's out-state auditors, noted that fewer out-state audits...
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