The proposed bill, known as the "Digital Advertising Services Tax Act," aims to impose a tax on the annual gross revenues derived from digital advertising services in Michigan, effective January 1, 2026. The tax rates are tiered based on the global annual gross revenues of the entity providing the services, ranging from 2.5% for revenues between $100 million and $1 billion, to 10% for revenues exceeding $15 billion. The bill defines key terms such as "annual gross revenues," "assessable base," and "digital advertising services," and outlines the responsibilities of the Michigan Department of Treasury in administering and collecting the tax.

Additionally, the bill mandates that entities with annual gross revenues from digital advertising services of at least $1 million must file annual and estimated quarterly returns with the Department of Treasury. It also requires these entities to maintain records related to their digital advertising services and the calculation of the tax owed. The revenue generated from this tax will be allocated to the State School Aid Fund and the Michigan Transportation Fund, ensuring that the funds are directed towards essential state services.