Michigan House Bill HB4054

Michigan 2023-2024 Regular Session

• Introduced: 2/1/23
• Refer: 2/1/23
• Report Pass: 3/15/23
• Engrossed: 3/16/23
• Refer: 3/21/23
• Report Pass: 4/20/23
• Engrossed: 4/26/23
• Enrolled: 4/27/23
• Chaptered: 5/9/23
• Passed: 5/9/23

Caption

Sales tax: exemptions; industrial processing exemption; clarify. Amends sec. 4t of 1933 PA 167 (MCL 205.54t). TIE BAR WITH: SB 0097'23

Impact

The enactment of HB 4054 is expected to have significant implications for state laws governing tax collection and exemptions. The bill explicitly enumerates different categories of tangible personal property that are exempt from sales tax when used in industrial processing activities, thereby simplifying compliance for businesses. Additionally, it stipulates the conditions under which these exemptions apply and outlines the measures for canceling outstanding balances resulting from previous assessments related to industrial processing activities.

Summary

House Bill 4054 serves to amend existing legislation regarding the taxation of industrial processing in Michigan. The bill clarifies the sales tax exemptions available to industrial processors concerning tangible personal property used in industrial activities. By defining the parameters of who qualifies for tax exemptions, the bill aims to stimulate business growth within the industrial sector by lowering the financial burden on processors who utilize specific equipment or materials in their operations.

Sentiment

The sentiment surrounding HB 4054 appears to be largely positive among business stakeholders, particularly those within the manufacturing industry. Proponents express that the bill will aid economic development by encouraging investment in industrial processes and infrastructure. However, some skepticism exists regarding the potential loss of state revenue because of these exemptions, which may lead to a more extensive discussion about the balance between fostering business initiatives and maintaining essential funding for public services and education.

Contention

Notable points of contention regarding HB 4054 include concerns from various advocacy groups regarding the potential impact on public revenue, particularly in relation to funding for education and social services. Critics argue that while the bill seeks to promote industrial growth, it could inadvertently restrict the state's capacity to generate funds, which are crucial for public welfare. Additionally, the requirement for the legislature to appropriate funds to offset potential revenue losses creates a layer of complexity in the legislative process.