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Bill

HB 6195

Streamline sales and use tax: exemptions; sale of eligible fuel; exempt. Amends secs. 3 & 5 of 2004 PA 175 (MCL 205.173 & 205.175).

2023-2024 Regular Session Introduced by Tom Kunse

Michigan bill creates sales tax exemption for eligible fuel, reducing state revenue while favoring specific fuel types in the marketplace.

bill electronically reproduced 11/26/2024
#streamlinesalesandusetax:exemptions
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Bill Summary · HB 6195

Legislative bill overview

HB 6195 amends Michigan's sales and use tax exemptions to create a new exemption for sales of "eligible fuel." The bill modifies the existing tax code (2004 PA 175) by altering sections that define taxable transactions and exemptions. The specific definition of "eligible fuel" and exemption parameters are referenced but not detailed in the available bill information.

Why is this important

Sales tax exemptions directly reduce state revenue and affect which industries or fuel types receive preferential tax treatment. This could impact Michigan's budget, influence fuel market competition, and signal policy priorities around energy sources (potentially renewable fuels, agricultural products, or specific fuel types). The exemption's scope—whether narrow or broad—will determine its fiscal impact.

Potential points of contention

  • Revenue impact: Any sales tax exemption reduces state tax revenue; lawmakers may dispute whether the fiscal cost is justified by policy goals
  • Market distortion: Exempting specific fuels could create competitive advantages for certain industries or fuel types over others, raising fairness concerns
  • Definition ambiguity: Without clear definition of "eligible fuel," implementation could be complicated or subject to legal challenge, potentially affecting businesses' tax compliance

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

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