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HB 6147

Transportation: motor fuel tax; gas tax holiday; provide for. Amends secs. 8 & 152 of 2000 PA 403 (MCL 207.1008 & 207.1152). TIE BAR WITH: HB 6146'26

2025-2026 Regular Session Introduced by Joey Andrews and 3 co-sponsors

Creates an inflation-adjusted motor fuel tax with a possible three-month zero-rate holiday if statewide gasoline hits $5/gal before 2026, plus updated alt-fuel tax rules.

bill electronically reproduced 06/30/2026
#transportation:motorfueltax
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WeVote Research Nonpartisan
Bill Summary · HB 6147

Overview

HB 6147 (2025-2026, Michigan) amends the Motor Fuel Tax Act (2000 PA 403) by adjusting how motor fuel taxes are set and when a potential temporary zero-rate would apply. The bill ties a tax-rate adjustment framework to inflation and certain price triggers, and it includes a provision delaying enactment until HB 6146 is enacted. It also updates the treatment of alternative fuels under Section 152.

Purpose and intent

  • Establish a dynamic, inflation-linked framework for motor fuel tax rates starting in 2022 and continuing annually, with specific provisions for 2022–2027 and beyond.
  • Create a potential temporary zero tax rate for up to three months if the statewide average gasoline price reaches $5.00 per gallon before December 31, 2026, with revenue-revenue-recapturing mechanisms.
  • Modernize reporting and tracking for blended and alternative fuels to ensure proper tax collection and transparency.
  • Tie enactment to the passage of HB 6146 as a tie-bar.

Key provisions and changes

Section 8 – Motor fuel tax rate structure

  • Current baseline rates:
    • Gasoline: 19 cents/gal (through 2016); 26.3 cents/gal (from 2017).
    • Diesel: 15 cents/gal (through 2016); 26.3 cents/gal (from 2017).
  • Inflation-adjusted rate mechanism (2022–2025 period):
    • Beginning Jan 1, 2022, and annually thereafter, the rate is derived by multiplying the prior year’s rate by 1 plus the smaller of 0.05 or the inflation rate, rounded to the nearest 0.1 cent.
  • 2026 special rate:
    • Jan 1–Dec 31, 2026: the rate is 51 cents multiplied by 1 plus the smaller of 0.05 or inflation, rounded to the nearest 0.1 cent.
  • Ongoing annual adjustment (post-2026):
    • For Jan 1, 2027 and later, the rate continues to be derived by the same inflation-based formula (excluding the 2026-specific multiplier).
  • Zero-rate “gas tax holiday” trigger (subsection 1(d)):
    • If the statewide average price of gasoline hits $5.00/gal before Dec 31, 2026, the motor fuel tax rate drops to 0 cents/gal for 3 months.
    • If triggered, the department must calculate lost revenue to the Michigan Transportation Fund and fund the shortfall from the Countercyclical Budget and Economic Stabilization Fund, credited back to the Transportation Fund.
    • The zero-rate event can occur only once.
  • Administrative and reporting rules:
    • Tax rate changes must be published at least 30 days before the effective date (or 30 days before the date the rate would take effect absent the trigger).
    • Clear identification of the rate per product on bills of lading/invoices, including blended products.
    • Terminal and reporting requirements updated to ensure compliance with terminal operators and suppliers.
  • Post-2025 flood of clarifications:
    • A 3,000-gallon threshold rule for end users regarding tax when fuel is stored or held outside normal bulk-terminal systems.
    • Inventory and reporting requirements for gallons subject to tax under subsection (10) (the potential retroactive, rate-difference tax) due by Feb 20, 2026.

Section 152 – Alternative fuels

  • Keeps tax treatment for alternative fuels aligned with the motor fuel tax rate, subject to certain exceptions:
    • Tax collection remains with alternative fuel dealers at delivery or sale, paid monthly to the department.
    • Clarifies measurement and taxation for alternative fuels measured in gallons or gallon equivalents, including gaseous forms (CNG, hydrogen, LNG, etc.).
    • Certain exemptions apply to specific users or situations with sunset dates, consistent with the broader motor fuel tax framework.

Enacting clause

  • The act’s effective date is contingent on the enactment of HB 6146 (tie-bar).

Who and what is affected

  • Motor fuel suppliers, importers, and distributors (through collection and remittance requirements).
  • End users/consumers of gasoline, diesel, and alternative fuels (through potential rate changes and refunds/deductions for nontaxable uses).
  • Terminal operators and facilities involved in production, distribution, and reporting of motor fuels.
  • Government entities: Michigan Department of Treasury/Transportation Fund administration, with impacts on revenue forecasting and budgeting (including the countercyclical fund and the transportation fund).
  • Alternative fuel dealers and users (Section 152) subject to equivalent taxation and reporting.

Procedural and timeline aspects

  • Inflation-based rate adjustments apply from 2022 onward, with a special 2026 rate structure.
  • The zero-rate period (if triggered) would occur for three months and requires revenue impact calculations and transfers to the transportation fund.
  • Publication and notice requirements: the department must publish rate notices 30 days in advance of changes.
  • The act’s effectiveness is contingent on HB 6146 becoming law.
  • Specific deadlines: inventory reporting and payment under the potential subsection (10) tax due by February 20, 2026.

Potential impacts

  • Consumers: possible inflation-adjusted tax increases over time, but with a potential temporary zero-rate holiday if gasoline prices spike to $5.00/gal.
  • State revenue: dynamic revenue stream with inflation-based growth punctuated by a possible three-month revenue shortfall followed by transfers from a stabilization fund.
  • Market participants: heightened reporting requirements, particularly for blended fuels and terminal operations; need for precise product coding and invoicing.
  • Budgetary planning: requires coordination with the tie-barred HB 6146 for full enactment and implementation.

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

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