HB 5479 Michigan House · 2025-2026 Regular Session

Streamline sales and use tax: other; taxation of electric fuel under the IFTA; provide for. Amends sec. 4gg of 1933 PA 167 (MCL 205.54gg).

HB 5479 exempts "eligible fuel" (including motor fuel, alternative fuel, and leaded racing fuel) from Michigan's general sales tax starting January 1, 2026. This directly affects businesses selling these fuels and consumers purchasing them for eligible uses, excluding specific cases like aviation fuel or fuel used for heating. The bill explicitly excludes electric fuel used in vehicles if it's already taxed under the Motor Carrier Fuel Tax Act or Motor Fuel Tax Act. It defines key terms like "electric fuel" and "eligible fuel" based on existing tax acts, with no exemption for fuel used in aircraft or residential/commercial heating systems.

Issues: ✓ Budget & Taxes

Bill status in committee 1 of 4 stages cleared

Introduction

Jan 2026

Committee Review

Floor Vote

Governor

Introduced Jan 27, 2026 Last action Mar 10, 2026

Maddy AI version diff · 1 comparison

What changed between versions

House Introduced Bill → Substitute (H-1) · 4 edits

MODERATE

The bill was amended to clarify that electric fuel used to propel vehicles is exempt from sales tax, provided it is already taxed under specific motor fuel acts. The definition of 'eligible fuel' was updated to explicitly include 'alternative fuel' and to add a new exemption for liquified petroleum gas (LPG) when used according to specific state definitions. A technical correction was made to the effective date clause to reference the correct section of the law.

Scope change

The bill's scope was expanded to explicitly include electric fuel in the sales tax exemption and to broaden the definition of eligible fuel to cover alternative fuels and specific uses of LPG.

ELIGIBILITY

Revised the sales tax exemption rule to explicitly state that electric fuel used to propel vehicles is exempt if taxed under the motor carrier fuel tax act or motor fuel tax act.

Added a new exemption for liquified petroleum gas (LPG) when it is used or intended for use as defined in the motor fuel tax act.

DEFINITION

Updated the definition of 'eligible fuel' to explicitly list 'alternative fuel' alongside motor fuel and leaded racing fuel.

TECHNICAL

Corrected a citation error in the effective date clause, changing the reference from 'section 4gg' to 'section 4n'.

Floor votes

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Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 10, 2026

Committee

referred to second reading

lower

Mar 10, 2026

Lower · Passed

reported with recommendation with substitute (H-1)

lower

Jan 27, 2026

Committee

referred to Committee on Transportation and Infrastructure

lower

Jan 27, 2026

Introduced

introduced by Representative Rep. Pat Outman

lower

1 primary · 0 co-sponsors