Michigan House Bill HB4825

Michigan 2025-2026 Regular Session

• Introduced: 8/27/25
• Refer: 8/27/25

Caption

Corporate income tax: credits; distributor credit for returnable containers; provide for. Amends 1967 PA 281 (MCL 206.1 - 206.847) by adding secs. 279 & 679. TIE BAR WITH: HB 4823'25

Impact

The enactment of HB 4825 is expected to have significant implications on state tax revenues and the state’s approach to encouraging recycling and proper disposal of beverage containers. By incentivizing distributors through this tax credit, the bill aims to promote environmental sustainability. The statute mandates that to qualify for the credit, distributors must attach a specified report with their annual tax return, thus introducing an administrative aspect that may require oversight by the state tax department. By allowing distributors, including partnerships and corporations, to claim credits proportional to their ownership share, the legislation seeks to broaden the base of beneficiaries.

Summary

House Bill 4825 proposes an amendment to the Income Tax Act of 1967, specifically adding sections 279 and 679 which introduce a tax credit for distributors originating deposits on beverage containers. Under the provisions of this bill, starting from January 1, 2026, such distributors will be eligible to claim a credit of $0.005 per returnable container sold during the tax year. Furthermore, the bill stipulates that beginning from tax year 2027, this credit amount will be adjusted annually based on the percentage increase in the United States Consumer Price Index for the preceding calendar year. This is aimed at ensuring that the credit remains relevant in terms of inflation adjustments.

Contention

While supporters of HB 4825 advocate for its potential benefits in promoting recycling, there are concerns about the overall fiscal impact on state income tax revenue and the effectiveness of such a tax credit in actually increasing recycling rates. Critics might also express apprehensions that the complexity of compliance and the requirement for detailed reporting could deter some smaller distributors from taking advantage of the credit. Moreover, there is a broader debate regarding whether tax credits are the most effective means of driving environmental change or if alternative regulatory approaches would yield better results.