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HB 4183

Transportation: motor fuel tax; motor fuel tax; increase and expand applicability. Amends sec. 8 of 2000 PA 403 (MCL 207.1008). TIE BAR WITH: HB 4182'25, HB 4181'25, HB 4180'25, HB 4185'25, HB 4186'25, HB 4187'25, HB 4184'25

2025-2026 Regular Session Introduced by Greg Alexander and 25 co-sponsors

The bill increases the motor fuel tax from 31¢ to 51¢ per gallon and ties future annual adjustments to inflation (or 5%), part of a broader road funding package.

assigned PA 20'25 with immediate effect
#transportation:motorfueltax
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WeVote Research Nonpartisan
Bill Summary · HB 4183

Summary — HB 4183 (Motor Fuel Tax Act amendment)

Status: Enacted as Public Act 20 of 2025 (effective October 7, 2025).
Subject: Transportation — motor fuel taxation. Tie-barred to a broader road‑funding package (HBs 4180–4187, HB 4230 and related bills).

Purpose

To raise the per‑gallon motor fuel tax (gasoline and diesel) to increase revenue for transportation purposes and to reset how future annual inflation adjustments are applied as part of a comprehensive road‑funding package.

Key provisions

  • Rate increase
    • Raises the motor fuel tax from the current 31¢ per gallon to 51¢ per gallon (applies to gasoline and diesel).
  • Inflation adjustments
    • For January 1, 2026: the rate for 2026 is calculated as 51¢ multiplied by (1 + the lesser of the inflation rate or 5%), rounded up to the nearest 0.1¢ (Senate substitute wording).
    • Beginning January 1, 2027 and thereafter, the annual rate will be adjusted by the lesser of the inflation rate or 5%, rounded up to the nearest 0.1¢ (consistent with prior statutory methodology).
  • Transitional/Inventory rule
    • Imposes a one‑time tax on the difference between the 2025 and 2026 rates on certain motor fuel held in inventory as of 11:59 p.m. on December 31, 2025 (generally applies to holdings >3,000 gallons and certain terminal inventory). Affected holders must inventory, report, and remit the tax by February 20, 2026.
  • Administrative and compliance provisions
    • Department of Treasury must publish notice of rate changes (at least 30 days before a rate’s effective date and specifically by Sept. 1, 2025 for the October 1, 2025 increase in earlier House versions).
    • Bills of lading and invoices must identify blended products and list the motor fuel tax rate separately; terminal operator and supplier licensing and reporting requirements are reinforced.
  • Scope exclusions
    • Tax is not imposed on motor fuel while it is in the bulk transfer/terminal system.
  • Other technical provisions
    • Continues taxation on net terminal losses above 0.5% and includes intent, measurement, and enforcement language.

Who is affected

  • Suppliers, importers, terminal operators, end users holding large on‑hand inventories (>3,000 gallons), and ultimately motor vehicle operators (through higher per‑gallon taxes).
  • State agencies (Treasury, MDOT) for administration and distribution of increased transportation revenue.
  • The bill was enacted as part of a package with companion measures that change sales/use tax treatment of fuel and create/redirect funds for local and state transportation projects, so local governments and school aid/General Fund allocations are also affected by the broader package.

Timeline & procedural notes

  • Introduced March 6, 2025; passed House (March/April 2025); Senate concurred with substitute (S‑4) October 3, 2025.
  • Approved by Governor and filed with Secretary of State October 7, 2025; effective immediately (Oct. 7, 2025).
  • The bill was tie‑barred to companion legislation in the transportation funding package; it was enacted as part of that package.

Fiscal impact (House Fiscal Agency estimates noted in committee materials)

  • HFA estimated increased State revenue on the order of hundreds of millions annually: e.g., roughly $269.1M (FY 2025‑26), $541.9M (FY 2026‑27), and on the order of ~$300M per year thereafter — actual impacts vary depending on final package components, fuel prices, and enactment of the companion bills.

Notes: Multiple drafts/substitutes modified effective dates, the inflation formula for 2026, and inventory transitional rules. The enacted Public Act reflects the Senate substitute (S‑4) language and was implemented as part of the broader enacted funding package.

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

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