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HB 4025

Martin and Palm Beach Counties

2026 Regular Session Introduced by John Snyder

HB 4025 reinstates the sales tax exemption for firearm safety devices, lowering costs for buyers and encouraging safer storage, with a potential impact on state revenue.

Approved by Governor
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WeVote Research Nonpartisan
Bill Summary · HB 4025

Summary — HB 4025 (2025): Sales tax exemption for firearm safety devices (MCL 205.54ll)

Main purpose

HB 4025 would (re)establish a sales-tax exemption for “firearm safety devices” by amending section 4ll of the General Sales Tax Act (MCL 205.54ll). It is paired with HB 4026, which addresses the corresponding use-tax exemption (MCL 205.94ll). The bills’ stated intent is to encourage safe storage and handling of firearms by reducing the purchase cost of safety devices.

Key provisions

  • Exemption: Makes the retail sale of a “firearm safety device” exempt from Michigan’s sales tax (and HB 4026 makes such devices exempt from use tax).
  • Definition: “Firearm safety device” means either:
    • a device installed on a firearm that prevents operation unless deactivated; or
    • a gun safe, gun case, lockbox, or similar device designed (by materials/construction) to prevent access except by a key, combination, biometric data, or similar means.
    • Excludes glass‑faced cabinets or storage primarily designed for firearm display.
  • Notice requirement: After a retail sale or transfer of a firearm, sellers must give purchasers a written notice and post conspicuous signage at points of sale indicating that the sale of firearm safety devices is exempt from sales and use tax.
  • Legislative intent on school funding: The bill expresses the legislature’s intent to annually appropriate sufficient general‑fund dollars to the State School Aid Fund to fully compensate for any lost school‑aid revenue resulting from the exemption (this intent language is nonbinding on future legislatures).
  • Interaction with prior law: Public Acts 14 and 15 of 2023 previously created similar exemptions that expired December 31, 2024. HB 4025/HB 4026 reinstate those exemptions — versions differ on duration (see “Versions & status”).

Fiscal impact

  • Estimated revenue loss: House and Senate fiscal analyses estimate a combined sales & use tax revenue reduction of roughly $1.0 million to $2.0 million annually on a full‑year basis (Treasury previously estimated about $1.4M/year under a broad interpretation).
  • Timing: Partial‑year effects depend on the effective date (e.g., an assumed July 1, 2025 effective date would reduce FY 2024‑25 receipts by roughly $350,000).
  • Distribution: Approximately 73% of sales‑tax revenue is constitutionally earmarked to the School Aid Fund and 10% to local revenue sharing; use‑tax deposits split differently (a material share also flows to the School Aid Fund).

Who is affected

  • Consumers: Reduced effective cost for eligible firearm safety devices.
  • Retailers: Must comply with notice/posting requirements; may process exempt sales.
  • State & local finances: Loss of sales and use tax revenues, largely affecting the School Aid Fund and local revenue‑sharing flows.
  • Public safety/advocacy groups: Supporters argue the incentive promotes safer firearm storage.

Versions & procedural status (as of documents)

  • As introduced (H-1): reinstated the exemption through December 31, 2025.
  • House-passed substitute (H-2): (per House Fiscal Agency summaries) removed the sunset — i.e., reinstated the exemption without a sunset date.
  • Related bill: HB 4026 mirrors the change for the Use Tax Act.
  • Legislative action: Introduced in January 2025; reported favorably by committee(s); passed the Michigan House (H‑2 substitute adopted) and was referred to the Senate Committee on Civil Rights, Judiciary, and Public Safety for further consideration.

Sources: bill text (MCL 205.54ll), House Fiscal Agency and Senate fiscal/committee analyses, bill legislative history.

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

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