Michigan Senators Take Steps Toward Gas-Tax Vacation

by Bruce Walker


As residents of the Great Lakes State and out-of-state tourists prepare to inaugurate the 2022 outdoor vacation season, they’re being stymied by gasoline prices rising steadily toward the $5 per gallon range.

The Michigan Senate has passed a slate of bills designed to alleviate drivers’ pain at the pump. If signed into law by Gov. Gretchen Whitmer, the bills would save Michigan drivers between 40 cents to 50 cents a gallon by temporarily eliminating the state’s 6% sales tax and 27-cent-per-gallon excise tax.

  • Senate Bill 972 (S-2) would amend the General Sales Tax Act to specify that, beginning June 15 through Sept. 15, the sale of eligible fuel (i.e., any fuel subject to a motor fuel tax) would be exempt from sales tax.
  • Senate Bill 973 (S-2) would amend the Use Tax Act to specify that, beginning June 15, through Sept. 15, the sale of eligible fuel would be exempt from use tax.
  • Senate Bill 974 (S-3) would amend the Streamlined Sales and Use Tax Revenue Equalization Act to suspend the levy and collection of a specific tax for using or consuming motor fuel and alternative fuel in a qualified commercial vehicle from June 15 through Sept. 15.

Senate Bill 1029 (S-1) would amend the Motor Fuel Tax Act. Five parts include that between June 15 and Sept. 15, the rate of tax on motor fuel would be zero cents per gallon; end users receive the benefits of the reduction of taxes proposed under the bill; prohibits a person other than an end user from enriching themselves from the proposed reduction in rate and requires the reduction to be passed on to an end user; appropriates from the General Fund, for fiscal year 2021-22, approximately $192.6 million among the country road commissions, and approximately $107.4 million among cities and villages, to compensate for revenue lost because of the bill’s proposed rate reduction; and specifies that if the tax on motor fuels were zero cents per gallon, then the tax on alternative fuels also would be zero cents per gallon.

The bills received bipartisan support, including affirmation from Michigan Senate Minority Leader Jim Ananich, D-Flint. The bills will now pass to the House of Representatives.

Whitmer vetoed a similar proposed legislation in April, while in March joined other Democratic governors to request a pause in the 18-cent-per-gallon federal gasoline tax, which did not happen. The Detroit News’ reports the governor is “encouraged” by the legislation.

“Gretchen Whitmer’s pattern of vetoing legislation that would provide relief to  Michigan families struggling under the pressures of inflation is concerning,” Eric Ventimiglia, executive director for Michigan Rising Action, said in a statement. “Governor Whitmer needs to put aside her desire to have her name attached to major solutions and support Senator Barrett’s gas tax vacation. To do anything else is not in the best interest for Michiganders.”

Spikes in the cost of a gallon of gas have broken records daily for the past two weeks. One year ago, gasoline was $2.98 a gallon. This Memorial Day weekend, gasoline is hovering on average around $4.60 a gallon.

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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.
Photo “Michigan Gas Station” by Dwight Burdette. CC BY 3.0.

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