Bill
HB 5085
HB 5085 eliminates Michigan's state excise tax on marijuana, cutting consumer costs but reducing state revenue and potentially affecting program funding.
Status (as provided)
- Bill number: HB 5085
- Introduced: March 13, 2025 (Rep. Steve Carra)
- Latest reproduction: electronically reproduced 09/26/2025; referred to Committee on Finance (09/26/2025)
- Legislative actions (selected): committee hearing and favorable report in April 2025; amendments and passage actions recorded in early May 2025 (record votes and engrossment recorded 05/05–05/06/2025).
Purpose
- HB 5085 would amend the Michigan Regulation and Taxation of Marihuana Act (2018 IL 1) by changing two statutory sections (Sec. 3 — definitions, MCL 333.27953; and Sec. 13 — the excise tax provisions, MCL 333.27963, as amended by 2023 PA 166). The central objective is to eliminate the state excise tax on marihuana established under the Act.
Key provisions (what the bill does)
- Repeals or removes the state excise tax authority created in section 13 of 2018 IL 1 (MCL 333.27963). In practice, this would stop collection of the state excise tax levied on marihuana transactions governed by the Act.
- Amendments to section 3 (definitions) appear in the introduced text; these clarify terminology used throughout the Act (for example, references to the “cannabis regulatory agency,” definitions of “marihuana,” “marihuana establishment,” and related terms). The definitions section is retained and updated to reflect agency names and programmatic language.
- Leaves other licensing, regulatory, and municipal provisions of the 2018 Act in place unless specifically altered by the bill language.
Who would be affected
- Consumers: Likely would see lower retail prices to the extent retailers pass savings from eliminated excise tax through to buyers.
- Licensees (growers, processors, retailers, transporters, etc.): Administrative and accounting changes due to removal of an excise tax on certain transfers or sales; potential business price-competitiveness impacts.
- State government: Loss of state excise tax revenue previously credited or distributed under current law (affecting funds that received those revenues).
- Local governments and programs: Any current statutory distributions tied to the excise tax (e.g., to municipalities, school aid, public health or safety programs) could see reduced receipts; the bill does not appear to create replacement funding.
- Cannabis Regulatory Agency (and tax administration): Changes in collection/administration responsibilities tied to the excise tax.
Fiscal and policy considerations
- Eliminating the excise tax would reduce recurring state revenues; the bill text does not include offsetting revenue sources or appropriations. A fiscal impact statement would be needed to estimate revenue loss and programmatic effects.
- The policy tradeoffs include consumer price relief and potential market effects versus reduced funding for programs previously supported by excise revenues.
Procedural notes
- The bill amends two enumerated sections of the Michigan Regulation and Taxation of Marihuana Act (2018 IL 1), as modified by 2023 PA 166.
- As of the dates in the record, the bill advanced through committee hearings and was acted on in May 2025; it was later reproduced and referred to the House Committee on Finance in September 2025. Further committee consideration or floor votes may follow.
For further analysis
- Review the full amended text of MCL 333.27963 to confirm the specific excise provisions being removed, and consult the state fiscal analysis for estimated revenue impacts and distributions currently tied to that tax.
Compiled from official sources — confirm details with the bill’s official record.
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