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HB 5863

Use tax: exemptions; credit card surcharges; exempt from use tax. Amends sec. 2 of 1937 PA 94 (MCL 205.92).

2023-2024 Regular Session Introduced by Mark Tisdel

Michigan bill exempts credit card surcharges from use tax, reducing state revenue by excluding merchant payment processing fees from taxable transactions.

bill electronically reproduced 06/26/2024
#usetax:exemptions
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WeVote Research Nonpartisan
Bill Summary · HB 5863

Legislative bill overview

HB 5863 proposes to amend Michigan's Use Tax Act (1937 PA 94) to exempt credit card surcharges from use tax obligations. The bill would create a new exemption category allowing businesses to avoid paying use tax on fees charged to customers for credit card transactions.

Why is this important

Use tax exemptions directly reduce state revenue, which funds public services like education, infrastructure, and social programs. This bill would shift some tax burden away from credit card processing fees, affecting Michigan's general fund and potentially impacting how businesses price goods and services to consumers.

Potential points of contention

  • Revenue impact: Creating new use tax exemptions reduces state tax collections without clear offsetting revenue sources or spending reductions
  • Fairness concerns: Exempting only credit card surcharges while other transaction fees remain taxable may create inconsistencies in tax treatment across payment methods
  • Beneficiary question: The exemption primarily benefits payment processors and merchants, with unclear consumer benefit since surcharges are typically passed to customers anyway

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

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