HB 4375 Michigan House · 2025-2026 Regular Session

Use tax: exemptions; offset of the trade in value of personal electronics; provide for. Amends sec. 2 of 1937 PA 94 (MCL 205.92). TIE BAR WITH: HB 4376'25

HB 4375 amends Michigan's Use Tax Act to limit the tax credit for trade-in value when purchasing new vehicles. It caps the deductible trade-in value at $5,000 for motor vehicles or recreational vehicles (previously $2,000, increased annually until 2018). This change directly affects vehicle buyers and dealers in transactions involving trade-ins, as it reduces the amount that can be offset against the purchase price for tax calculation purposes. The bill updates Section 2(f)(xii) of the Use Tax Act to reflect this $5,000 maximum. The change became effective immediately after the bill passed the Michigan House on October 23, 2025.

Issues: ✗ Budget & Taxes

Bill status passed both 4 of 5 stages cleared

Introduction

Apr 2025

Committee Review

Oct 2025

House Passage

Oct 2025

Senate Passage

Oct 2025

Governor

Introduced Apr 22, 2025 Last action Oct 23, 2025

Maddy AI version diff · 1 comparison

What changed between versions

House Introduced Bill → As Passed by the House · 5 edits · Oct 21, 2025

MODERATE

This bill amends Michigan's Use Tax Act to update definitions and clarify what counts as 'purchase price' for tax purposes. It adds new definitions for terms like 'Purchase price', 'Consumer', and 'Business', and expands the list of items included in taxable purchases. The changes also establish specific rules for handling trade-ins, third-party discounts, and delivery/installation charges, while creating a process to cancel outstanding tax assessments related to delivery charges issued before April 2023.

Scope change

The bill expands the scope of what constitutes taxable 'purchase price' by explicitly including certain costs like delivery and installation charges, while also clarifying exclusions for specific items like employee discounts and third-party coupons.

DEFINITION

Added new definitions for 'Purchase price', 'Consumer', 'Business', 'Department', 'Tax', 'Tangible personal property', and several other terms to clarify their meanings under the Use Tax Act.

Expanded the definition of 'Person' to include counties and other groups acting as a unit, and clarified that 'Use' includes converting exempt property to taxable use.

REQUIREMENT

Added detailed rules for what constitutes 'Purchase price', including specific inclusions like delivery and installation charges, and exclusions for trade-ins, employee discounts, and third-party coupons.

Added requirements for taxpayers to maintain separate books and records to show transactions used to determine use tax, particularly for delivery or installation charges.

TIMELINE

Established a deadline of July 25, 2023 for the Department of Treasury to cancel outstanding tax assessments related to delivery and installation charges issued before April 26, 2023.

Floor votes · House Oct 21, 2025

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Amendments

Oct 23, 2025

Committee

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION

upper

Oct 23, 2025

Upper · Passed

PASSED BY HOUSE WITH IMMEDIATE EFFECT

upper

Oct 21, 2025

Lower · Passed

passed; given immediate effect Roll Call #253 Yeas 71 Nays 33 Excused 0 Not Voting 6

lower

Oct 21, 2025

Introduced

amended

lower

Sep 9, 2025

Committee

referred to second reading

lower

Sep 9, 2025

Lower · Passed

reported with recommendation without amendment

lower

Apr 22, 2025

Committee

referred to Committee on Finance

lower

Apr 22, 2025

Introduced

introduced by Representative Rep. Steve Frisbie

lower

1 primary · 16 co-sponsors