Michigan Senate Bill SB0885

Michigan 2023-2024 Regular Session

• Introduced: 5/30/24
• Refer: 5/30/24

Caption

Sales tax: exemptions; purchase of certain aircraft and aviation equipment; exempt. Amends sec. 4x of 1933 PA 167 (MCL 205.54x).

Impact

The proposed amendments are expected to significantly affect the aviation sector by easing the financial burden on domestic air carriers. By exempting sales tax on aircraft purchases and related materials, the bill aims to stimulate economic activity and investment in aviation. Additionally, it ensures that transactions involving aircraft that temporarily operate in Michigan are covered under the exemption, thereby encouraging more efficient business practices and streamlining operations for buyers and sellers alike.

Summary

Senate Bill 0885 aims to amend the General Sales Tax Act of 1933 in Michigan by introducing sales tax exemptions for certain transactions involving aircraft. Specifically, the bill provides exemptions from sales tax for sales of aircraft that have a maximum certificated takeoff weight of at least 6,000 pounds, provided these aircraft are used solely for the transport of air cargo, passengers, or a combination of both. This move is portrayed as a way to promote business within the aviation industry, particularly benefiting domestic air carriers by reducing operational costs associated with acquiring and maintaining aircraft.

Contention

The bill may encounter contention primarily around the implications of tax exemptions on state revenue, particularly concerning funding for crucial services like education. An enacting section of the bill highlights the legislature's intent to appropriate sufficient funds from the state general fund to the state school aid fund to compensate for any revenue losses incurred due to these exemptions. This aspect may be debated among lawmakers and the public, as there could be concerns regarding the long-term sustainability of funding for critical state programs while simultaneously granting tax breaks to specific industries.