(1) “Local property taxes” means ad valorem property taxes levied by a city, village, or township.

    (2) “Local income and excise taxes” means collections of taxes pursuant to the city income tax act, Act No. 284 of the Public Acts of 1964, as amended, being section 141.501 to 141.787 of the Michigan Compiled Laws, or pursuant to the city utility users tax act, Act No. 198 of the Public Acts of 1970, as amended, being section 141.801 to 141.837 of the Michigan Compiled Laws, or pursuant to any acts authorizing local income or excise taxes by a city, village, or township, which collections are modified as follows:

    (a) For a city levying a local income tax, an amount shall be excluded prior to determining the rates pursuant to this act, which amount shall be determined by a proportion to be the ratio whose numerator is 1/2 of 1% and whose denominator is the sum of the resident rate multiplied by 2 and the nonresident rate multiplied by 1.

    (b) If the local income tax actually collected by a city from nonresident individuals is less than the amount determined pursuant to subdivision (a), the amount excluded prior to determining the rates shall be the amount of actual collections from nonresidents as certified by the city to the department of treasury.

    (3) “Local taxes” means local property taxes, local income and excise taxes, and, for distributions after June 30, 1987, special assessments, which special assessments meet all of the following criteria:

    (a) The assessment district is the entire city, village, or township.

    (b) The assessment is levied on an ad valorem basis against all real property in the city, village, or township.

    (4) “Overlapping taxes” means ad valorem property taxes, income taxes, and excise taxes levied in a city, village, or township by any of the following:

    (a) A county.

    (b) A school district, intermediate school district, or community college district.

    (c) An authority or other governmental unit or agency except the state.

    (5) “Special assessments” means any of the following, except as otherwise provided in subsection (6):

    (a) Special assessments imposed by a city, village, or township against property in the city, village, or township for streets, sidewalks, storm or sanitary sewers, water supply, drains, street lights, fire protection, police protection, or any other public improvement, facility, or service authorized by charter, ordinance, or statute to be imposed on the basis of benefit to the property.

    (b) Special assessments imposed by a county against property in the city, village, or township to pay a portion of the cost of constructing or maintaining a county public improvement determined on the basis of the benefit of the public improvement to the property.

    (c) For distributions after June 30, 1976, capital improvement charges imposed in lieu of special assessments pursuant to charter, ordinance, or statute by a city, village, or township to pay for a portion of the cost of constructing a public improvement determined on the basis of the benefit of the public improvement to the property.

    (6) “Special assessment” does not include a special assessment that is included in local taxes under subsection (3).