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SB 152

38th Senatorial District Local Act-1.

2025-2026 Session Introduced by Mujtaba Mohammed

SB 152 expands Michigan sales-tax exemptions for aircraft and parts used by domestic air carriers in interstate, scheduled passenger/cargo service, with basing and timing limits.

Passed 1st Reading
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Bill Summary · SB 152

Summary — SB 152 (Sales tax exemptions for certain aircraft and aviation equipment)

Status: Introduced Jan 23, 2025; referred to Committee on Finance, Insurance, and Consumer Protection
Subject: Aeronautics; Sales tax exemptions (amends MCL 205.54x)
Effective date (if enacted): 90 days after enactment

Main purpose

SB 152 would expand sales‑tax exemptions by excluding certain sales of aircraft and aviation parts/materials from Michigan’s general sales tax when those sales meet specified conditions. The stated objective is to exempt transactions that facilitate interstate air transport, aircraft sales for scheduled passenger service, and short‑term in‑state maintenance/customization tied to out‑of‑state aircraft.

Key provisions

  • Exempts from Michigan sales tax a sale to a “domestic air carrier” of:
    • Any aircraft with a maximum certificated takeoff weight of at least 6,000 pounds used solely for transporting cargo, passengers, or both.
  • Exempts sales of parts and materials (but not shop equipment or fuel) that are affixed or to be affixed to an aircraft, where both:
    • The aircraft departs Michigan within 15 days after the earlier of final billing/authorization for return to service, completion of maintenance record entry, and completion of required test flight/ground test (per 14 CFR 91.407); and
    • The aircraft was not based in or registered in Michigan before the parts/materials were affixed and is not based/registered in Michigan after.
  • Exempts sale of an aircraft to a person for subsequent lease to a domestic air carrier (operating under FAA 14 CFR part 121) for use solely in regularly scheduled passenger transport.
  • Clarifies terms used in the section, including definitions for “aircraft,” “based in this state,” “customization,” “domestic air carrier,” “prepurchase evaluation,” and “registered in this state.”

Who is affected

  • Domestic air carriers and their lessors (potentially reduced acquisition costs).
  • Sellers of aircraft, parts suppliers, maintenance/repair/customization facilities (MROs) that perform work tied to aircraft that leave the state.
  • Aircraft lessees and purchasers in scheduled passenger/cargo operations.
  • Michigan’s State School Aid Fund and state revenue administration (see fiscal intent below).

Fiscal impact and legislative intent

  • The bill includes legislative intent that the Legislature annually appropriate sufficient funds from the state general fund to the State School Aid Fund to fully compensate for any revenue losses to that fund resulting from the exemption.
  • The bill text itself does not provide an estimate of revenue loss; fiscal effects would depend on the volume and value of exempted transactions.

Procedural/timeline notes

  • If enacted, the law would take effect 90 days after the date it becomes law.
  • As introduced, SB 152 is under committee consideration (Finance, Insurance, and Consumer Protection).

Notes: The exemption excludes shop equipment and fuel from the parts/materials exemption and sets clear timing and basing/registration tests to limit applicability to aircraft that are transiting out of state or are part of interstate/commercial operations.

Compiled from official sources — confirm details with the bill’s official record.

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