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HB 5866

Taxation: other; HOPE zone exemption; provide for. Amends sec. 28 of 1941 PA 122 (MCL 205.28). TIE BAR WITH: HB 5852'26

2025-2026 Regular Session Introduced by Tyrone Carter and 10 co-sponsors

The bill tightens tax confidentiality rules, expanding allowed disclosures under strict conditions while increasing penalties for improper disclosure.

bill electronically reproduced 04/22/2026
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Bill Summary · HB 5866

Summary of HB 5866 (Michigan, 2025-2026)

Note: This bill ties to HB 5852 and would amend section 28 of 1941 PA 122, as amended by 2023 PA 102.

1) Purpose and Intent

  • The bill amends general provisions governing the administration, enforcement, and information-sharing related to taxes administered under Michigan law.
  • It clarifies and expands protections, duties, and disclosures around tax administration, particularly regarding confidentiality, information sharing, and enforcement mechanisms.
  • The enactment is contingent on passage of Senate Bill No. ____ or House Bill No. 5852 of the 103rd Legislature (a tie-bar). If neither is enacted, the bill does not take effect.

2) Key Provisions and Changes

A. Service and Notice Provisions (Sec. 28(1))

  • Establishes notice requirements for taxpayers:
    • Notice may be by personal service or certified mail to the taxpayer’s last known address.
    • Service to the department may be made similarly.

B. Legal Proceedings and Collection (Sec. 28(1)(c)-(d))

  • An injunction cannot stay tax assessment/collection proceedings.
  • The department may sue in any county where the taxpayer resides or transacts business.

C. Information Requests and Hearings (Sec. 28(1)(d))

  • The State Treasurer can request information/records from other state departments or agencies to perform duties under the act.
  • Agencies must cooperate and may be required to hold hearings under the Administrative Procedures Act to consider withholding licenses/permits for nonpayment.

D. Confidentiality and Disclosure (Sec. 28(1)(e)-(f), Sec. 28(2)-(5))

  • Broad confidentiality rules restrict disclosure of tax information, audit criteria, and related data.
  • Exceptions allow disclosures to administer or enforce tax laws, or under judicial orders, federal/state investigations, or as part of reciprocal confidentiality agreements.
  • Specific allowances include disclosures related to:
    • General property tax administration
    • Michigan Economic Growth Authority (MEGA) information
    • Michigan Strategic Fund data related to programs with new written agreements after Aug. 25, 2017
    • Casino wagering and adjusted gross receipts data under certain conditions
    • Donor registry data and HOPE zone program disclosures (HOPE zone Act)
  • Violations of confidentiality provisions can result in felony penalties (up to $5,000 fine and/or up to 5 years imprisonment) and potential discharge or dismissal for state employees.

E. Recordkeeping (Sec. 28(3))

  • Taxpayers must maintain accurate records necessary for proper tax liability determinations.

F. Restrictions on Disclosure and Penalties (Sec. 28(4)-(5))

  • Limitations on disclosure of information obtained for general property tax administration and MEGA-related data.
  • Civil penalties: up to $5,000 per violation for improper disclosure, with governance similar to other confidentiality penalties.
  • Legislator/employee-specific restrictions apply for certain MEGA disclosures, with civil penalties if violated.

G. Annual Reporting (Sec. 28(6))

  • The department must annually prepare and publish statistics related to the Michigan Business Tax Act, with breakdowns by sector and firm size (where groupings have at least 10 taxpayers).
  • Required metrics include:
    • Apportioned business income tax base
    • Apportioned modified gross receipts base
    • Business income tax liability
    • Use of credits
    • Modified gross receipts tax liability
    • Total final liability and total liability before credits

H. Additional Confidentiality Provisions (Sec. 28(7))

  • Permits disclosure of certain information described in subsection (1) for specified tax programs and agreements, subject to limitations similar to those in subsections (1) and (6).

I. Definitions (Sec. 28(8))

  • Reiterates that “adjusted gross receipts” and “wagering tax” refer to terms described in the Michigan Gaming Control and Revenue Act.

3) Who/What Would Be Affected

  • Taxpayers under Michigan’s tax system administered by the Department of Treasury.
  • State departments, agencies, and institutions subject to information requests by the State Treasurer.
  • Agencies involved in MEGA, HOPE zone programs, Michigan Strategic Fund programs, and casino-related tax data.
  • State employees who handle confidential information and who could face penalties for improper disclosure.
  • Taxpayers and businesses subject to Michigan Business Tax Act reporting and credit usage disclosures.
  • Legislative committees, fiscal agencies, and the Department of Treasury for annual tax statistics reporting.

4) Procedural and Timeline Aspects

  • Enactment is contingent on the passage of HB 5852 or related Senate Bill (tie-bar condition).
  • If enacted, provisions become effective as specified within the amended statute; otherwise, they remain inactive.
  • The bill requires annual reporting on specific tax metrics, to be distributed to legislative chairs and fiscal agencies.

5) Practical Implications

  • Strengthened confidentiality protections and broader permissible disclosures under controlled circumstances.
  • Enhanced enforcement leverage through clearer notice, service, and legal processes.
  • Increased transparency via annual publication of key business tax statistics.
  • Potential penalties for misuse of confidential information to deter improper disclosures.

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

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