This bill amends the Michigan Motor Fuel Tax Act to establish a temporary gas tax holiday that activates if the statewide average price of gasoline reaches $5.00 per gallon before the end of 2026. Under this provision, the tax rate would drop to zero cents per gallon for a three-month period, with the lost revenue automatically transferred from a state stabilization fund to the Michigan Transportation Fund. The legislation also updates the general tax rate structure to include annual adjustments based on inflation or a fixed 5% increase, whichever is lower, while maintaining specific rates for fuel held in storage as of the end of 2025. Additionally, the bill clarifies reporting requirements for fuel suppliers and terminals to ensure accurate tracking of blended products and tax liabilities.
This bill requires Michigan businesses selling car parts and accessories to separately report and pay sales tax on those specific items starting October 1, 2027. To prepare for this change, the state Department of Treasury must define which products count as car parts by March 31, 2027, and create a new form for businesses to use. Companies will need to set up systems to identify these items at the point of sale and submit distinct payments for them alongside their regular monthly tax returns. The bill amends existing state tax laws to establish these new reporting and payment procedures without changing how the tax revenue is currently distributed.
Senate Bill 987 amends Michigan's use tax law to maintain the exemption of electricity, natural gas, and home heating fuels from the additional 2% use tax for residential use. This change ensures that households continue to pay only the standard sales tax rate on these essential utilities rather than the higher rate. The bill directly affects Michigan residents by preserving the current tax treatment of residential energy consumption. Introduced by Senator Jonathan Lindsey on May 20, 2026, the legislation is currently under review by the Committee on Government Operations.
Senate Bill 998 modifies Michigan's use tax law to clarify how credit for trade-in vehicles is calculated when determining the taxable amount of a purchase. The bill updates the definition of 'purchase price' to ensure that the value of a trade-in vehicle used as part payment is properly excluded from the tax base, aligning the rules with existing provisions for watercraft. This change directly affects vehicle dealers and consumers who trade in their current vehicles to buy new ones, ensuring the tax is applied only to the net cost rather than the full purchase price.
This bill modifies Michigan's sales tax laws to provide tax exemptions for equipment used in enterprise data centers, which are facilities that meet specific size and job creation criteria. To qualify for these exemptions, operators must receive a certificate from the Michigan Strategic Fund and submit annual reports detailing employment, investment, and compliance with green building standards. The legislation establishes a formal application process where the fund reviews requests within 120 days and sets a maximum six-year timeline for facilities to meet their operational requirements. Additionally, the bill mandates that the fund report job numbers to state leadership by April 1, 2026, to ensure the program continues to generate the intended economic benefits.
Senate Bill 897 amends Michigan's General Sales Tax Act to clarify and expand exemptions for specific entities and agricultural activities. The bill directly affects nonprofit organizations, religious institutions, schools, and agricultural businesses by defining which sales of tangible personal property are not subject to sales tax. Key provisions include explicit exemptions for parent cooperative preschools, expanded definitions for agricultural machinery and equipment used in farming, and specific rules for newspapers and periodicals. The legislation also clarifies that certain structures like greenhouses and portable grain bins are not considered real estate for tax purposes if they can be disassembled without affecting their functionality.
Senate Bill 965 updates Michigan's use tax laws to clarify registration requirements for businesses and strengthen rules for online marketplace facilitators. The bill mandates that foreign corporations must register for use tax before obtaining permission to do business in the state and requires aircraft lessors to pay use tax on lease receipts instead of sales tax on the full property cost. It also defines marketplace facilitators as entities that must collect and remit use tax on sales made by third-party sellers on their platforms, even if those sellers do not have a physical presence in Michigan. Additionally, the bill limits the ability to sue marketplace facilitators for overpaid taxes and protects them from liability if sellers fail to provide accurate information about their transactions.
This bill modifies Michigan's sales tax exemptions for data center equipment, requiring that these tax breaks continue only if specific job creation targets are met. For existing data centers, the exemption applies after 2022 only if at least 400 related jobs are created, and after 2026 only if at least 1,000 such jobs are established. For new enterprise data centers, the bill mandates that owners receive a certificate from the Michigan Strategic Fund confirming they plan to meet certain criteria within six years before they can claim the tax exemption. Additionally, the law requires these facilities to report annual data on employment and investments to the fund and achieve specific green building standards within three years of opening.
This bill modifies Michigan's use tax laws to provide tax exemptions for data center equipment used by qualified facilities. It requires these facilities to obtain a certificate from the Michigan Strategic Fund, which mandates that they create a specific number of jobs and meet green building standards within a six-year timeframe. To maintain the exemption, operators must annually report on employment, investments, and compliance with environmental criteria to the state. The legislation applies to existing data centers through 2050 and to new enterprise data centers through 2065, provided they meet the established performance requirements.
This bill establishes a temporary gas tax holiday in Michigan, setting the motor fuel tax rate to zero cents per gallon starting immediately. The zero rate will remain in effect until either November 1, 2026, or the nationwide average gas price drops below $3.50, whichever happens first. While the holiday is active, the standard tax rates for gasoline and diesel are suspended, and the bill includes specific reporting requirements for suppliers and end users holding fuel inventory.
