Michigan House Bill HB6194

Michigan 2023-2024 Regular Session

• Introduced: 11/26/24
• Refer: 11/26/24

Caption

Sales tax: exemptions; sale of eligible fuel: exempt. Amends secs. 6a & 25 of 1933 PA 167 (MCL 205.56a & 205.75) & adds sec. 4gg. TIE BAR WITH: HB 6195'24, HB 6196'24, HB 6197'24

Impact

The proposed legislation could have significant repercussions on state revenue streams, particularly in how fuel sales are taxed. By exempting eligible fuel from sales tax, there may be considerable revenue losses that need to be addressed. The amendment also ties provisions with related legislative bills that must be enacted for HB 6194 to take effect, hinting at a broader strategy to enhance the legislative framework regarding fuel taxes in Michigan.

Summary

House Bill 6194 seeks to amend the General Sales Tax Act of 1933 by adding a new provision that would exempt the sale at retail of eligible fuel from taxes starting October 1, 2025. The term 'eligible fuel' is defined to encompass any fuel that is subject to the motor fuel tax. This exemption is intended to alleviate the tax burden on consumers and businesses that rely on fuel, potentially leading to reduced prices or increased accessibility for essential services relying on such fuels.

Contention

Discussions surrounding HB 6194 are likely to revolve around the potential fiscal impact on the state’s budget, particularly concerning education and infrastructure funding, as sales tax collections from fuels contribute to the state school aid fund. Legislators may debate the implications of reduced revenue versus the benefits of providing relief to consumers. Concerns over the cumulative effects of such exemptions in conjunction with other pending legislation may also arise, leading to discussions about the overall effectiveness and sustainability of state funding mechanisms.