Michigan House Bill HB4312

Michigan 2025-2026 Regular Session

• Introduced: 4/15/25
• Refer: 4/15/25

Caption

Sales tax: distribution; distribution of sales tax revenue for the revenue sharing trust fund; provide for. Amends sec. 25 of 1933 PA 167 (MCL 205.75). TIE BAR WITH: HB 4311'25

Impact

The potential implications of HB4312 on state laws are multifaceted. It aims to enhance local government finances through improved revenue sharing while reallocating funds from the general sales tax to specific community needs. By ensuring local entities receive a consistent and considerable share from sales tax revenues, the bill addresses concerns of local government underfunding, thereby fostering economic development and enabling better infrastructural support at the community level. However, the exact fiscal effects will depend on the tax collection outcomes and economic activities across various regions.

Summary

House Bill 4312 seeks to amend Section 25 of the General Sales Tax Act in Michigan to alter the distribution of sales tax revenue. The bill specifies that of the collections generated from a 4% sales tax, a portion will be allocated differently under the newly proposed structure. Notably, starting from October 1, 2025, 8.62% of collections will directly support a revenue sharing trust fund, specifically earmarked for cities, villages, townships, and counties, thereby impacting local government funding significantly. This aim reflects an effort to create a more equitable distribution of sales tax revenues across the state.

Contention

The bill might face pushback from various stakeholders, primarily depending on how existing funds and allocations are impacted. Concerns have emerged about whether local governments will benefit sufficiently from the proposed changes or if this measure merely redistributes existing resources without increasing overall funding. Additionally, there may be discussions regarding the balance of state versus local authority in managing their finances and the implications this has for long-term planning and resource allocation within Michigan's municipalities.