WeVote
Log In

Bill

Bill

HB 5862

Sales tax: exemptions; credit card surcharges; exempt from sales tax. Amends sec. 1 of 1933 PA 167 (MCL 205.51).

2023-2024 Regular Session Introduced by Angela Rigas and 1 co-sponsor

Michigan bill exempts credit card surcharges from sales tax, reducing consumer costs but eliminating state revenue without replacement funding.

bill electronically reproduced 06/26/2024
#salestax:exemptions
0
WeVote Research Nonpartisan
Bill Summary · HB 5862

Legislative bill overview

HB 5862 would exempt credit card surcharges from Michigan's sales tax by amending the state's sales tax code. Currently, when merchants add surcharges to credit card transactions, those charges are subject to sales tax; this bill would remove that tax obligation.

Why is this important

This directly affects pricing transparency and consumer costs. Exempting surcharges from sales tax would reduce the final cost consumers pay when using credit cards, potentially incentivizing card usage and affecting merchant pricing strategies. It also represents a revenue decision for the state, reducing tax collections.

Potential points of contention

  • Revenue impact: Exempting surcharges reduces state tax revenue with no identified offset or replacement funding source
  • Fairness questions: Exempting only credit card surcharges while other fees remain taxable creates inconsistent treatment; cash-paying customers wouldn't benefit from this exemption
  • Merchant incentives: The tax reduction may not meaningfully lower consumer prices if merchants retain savings rather than passing them to customers, making the policy's practical benefit unclear

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

Sign in to ask a question.