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HB 6197

Use tax: exemptions; storage, use, or consumption of eligible fuel; exempt. Amends sec. 21 of 1937 PA 94 (MCL 205.111) & adds sec. 4gg.

2023-2024 Regular Session Introduced by Tom Kunse

Michigan bill exempts undefined "eligible fuel" from use tax, reducing state revenue while benefiting certain fuel users—definition and fiscal impact unclear.

bill electronically reproduced 11/26/2024
#usetax:exemptions
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WeVote Research Nonpartisan
Bill Summary · HB 6197

Legislative bill overview

HB 6197 proposes to amend Michigan's Use Tax Act by creating a new exemption for "eligible fuel" from use tax requirements. The bill would exempt certain fuels from the state's use tax, which typically applies to goods stored, used, or consumed in Michigan that weren't subject to sales tax at purchase.

Why is this important

Use tax exemptions reduce state revenue and shift the tax burden to other taxpayers or services. This exemption would specifically benefit businesses or consumers using qualifying fuels, potentially lowering operational costs in sectors like agriculture, manufacturing, or transportation depending on how "eligible fuel" is defined. The bill's impact depends entirely on the definition of "eligible fuel," which is not detailed in the current bill text.

Potential points of contention

  • Undefined key term: The bill references "eligible fuel" without defining it in the provided text, making it impossible to assess scope, affected industries, or revenue impact
  • Revenue implications: Use tax exemptions reduce state general fund revenue; unclear whether this is offset elsewhere or represents a net fiscal loss
  • Competitive fairness: Exempting specific fuel types may create unequal competitive conditions between businesses using different fuel sources or between in-state and out-of-state competitors

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

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