Bill
HB 4026
Reinstates and removes sunset on Michigan use tax exemption for firearm safety devices; exempts storage/usage, starts 90 days after enactment; requires retailer notice to buyers.
Status: Passed by the Michigan House (H‑2 substitute), March 13, 2025; referred to Senate Committee on Civil Rights, Judiciary, and Public Safety. Introduced Jan 28, 2025 by Rep. Brad Paquette (chief co-sponsor added Apr 7, 2025).
Purpose
- Reinstate and extend the state use‑tax exemption for “firearm safety devices” that had been created by 2023 Public Acts 14 and 15 and that expired at the end of 2024. The House‑passed substitute removes the previously specified expiration date in the statute, effectively making the exemption ongoing (no sunset) as enacted by the House.
Key provisions
- Amends section 4ll of the Use Tax Act (MCL 205.94ll):
- Beginning 90 days after the amendatory act’s effective date, the use tax will not apply to the storage, use, or consumption of a “firearm safety device.”
- Requires sellers, after a retail sale or transfer of a firearm, to provide written notice to the purchaser and to post conspicuous in‑store notice that the sale of firearm safety devices is exempt from state sales and use tax (the House substitute deletes the December 31, 2024 expiration date from that notice).
- Defines “firearm safety device” to include:
- Devices installed on a firearm that prevent operation until deactivated; and
- Gun safes, gun cases, lockboxes, or similar storage devices designed to prevent access except by key, combination, biometric data, or similar means.
- Explicitly excludes glass‑faced cabinets or storage primarily designed to display firearms.
Legislative intent language
- States the legislature’s intent to annually appropriate general‑fund money to the State School Aid Fund to offset any lost school aid revenue attributable to the exemption (the language expresses intent and is not a binding appropriation).
Who is affected
- Consumers purchasing qualifying firearm safety devices (they would not pay Michigan use tax on those purchases).
- Retailers who sell firearms and related safety devices (required to post and provide notice).
- State and local finances: reduced sales and use tax receipts; allocation effects on the School Aid Fund and General Fund.
Fiscal impact
- Estimated revenue reduction: approximately $1.0 million to $2.0 million per full fiscal year (Department of Treasury estimates under broader interpretation ≈ $1.4 million/year).
- Timing matters: partial‑year effects depend on effective date (one estimate: ~$350,000 reduction in FY 2024–25 if effective July 1, 2025).
- Sales tax receipts are constitutionally earmarked largely to the School Aid Fund (~73%) and local revenue sharing (~10%); use tax splits also affect School Aid Fund and General Fund (estimates vary by document).
Procedural/timeline notes
- Public Acts 14 & 15 (2023) created the original exemptions, which expired Dec. 31, 2024.
- HB 4026 (H‑2) passed the House with immediate effect on March 13, 2025; sent to the Senate committee noted above for further consideration.
- Different draft analyses referenced both (a) reinstatement without a sunset and (b) an earlier draft that would have extended the exemption only through Dec. 31, 2025 — the House‑passed H‑2 indicates removal of the 2024 sunset (no expiration date included).
Source documents: House Fiscal Agency and Senate fiscal/committee analyses and the House‑passed substitute text of HB 4026.
Compiled from official sources — confirm details with the bill’s official record.
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