Michigan – Use Tax Act Amended to Include Additional Taxes

SALT Report 1988 – The Michigan State Legislature recently approved a bill that would amend the Use Tax Act which requires that use tax be levied on the total price of the property or services purchased. If passed, HB 6026 would divide the existing use tax into two components:

  • The metropolitan areas component levied by the metropolitan authority, and
  • The state component levied by the state

The total of the two would equal 6%, the maximum allowed by the State Constitution.  The rate of each component would be calculated annually by the state’s Treasury. The state component would be the portion of the rate remaining after sufficient revenues had been generated by the metropolitan areas component as required in the Bill.

Further, the Bill requires that 2% of the use tax be dedicated to the School Aid Fund and is not to be included in the calculations. Rather, this amount will remain part of the state component tax.

The amendment to the Use Tax Act will not take effect unless approved by a majority vote at an election that will be held in 2014. If approved, the amendments will take effect in January 1, 2015.

For Further Information:

Michigan State Legislature – Act 408 Laws 2012, House Bill 6026