Michigan House Bill HB4424

Michigan 2025-2026 Regular Session

• Introduced: 5/6/25
• Refer: 5/6/25

Caption

Corporate income tax: credits; credit for use of sustainable aviation fuel; provide for. Amends 1967 PA 287 (MCL 206.1 - 206.847) by adding sec. 678. TIE BAR WITH: HB 4425'25

Impact

The bill is anticipated to have significant implications for state laws concerning income tax credits and environmental sustainability initiatives. By introducing this credit, HB4424 seeks to foster a greener aviation industry in Michigan, aligning with broader state and national goals of reducing greenhouse gas emissions. The proposed credit increases with the percentage reduction in life-cycle emissions, further promoting sustainable practices among qualified taxpayers, which may lead to economic benefits within the state as the demand for sustainable aviation fuel rises.

Summary

House Bill 4424 proposes an amendment to the Income Tax Act of 1967, introducing a tax credit for the use of sustainable aviation fuel. This credit is designed to incentivize Michigan-based producers and blenders of sustainable aviation fuel, allowing them to claim $1.50 per gallon of fuel sold in the state that meets specific production and sale criteria. The credit is applicable for tax years beginning January 1, 2025, thereby aiming to stimulate local production and usage of sustainable fuels within the aviation sector.

Contention

While the bill aims to enhance the state's environmental profile and support sustainable energy sources, it may face scrutiny regarding its potential impact on state revenues and the criteria for qualified taxpayers. Critics may argue about the long-term efficacy of such incentives and whether they provide an equitable opportunity for all stakeholders in the energy sector. Moreover, concerns may arise regarding the robustness of regulations governing the certification of sustainable aviation fuel, ensuring that the environmental benefits touted by the bill are indeed realized.