The proposed bill, known as the "Digital Advertising Services Tax Act," establishes a tax on annual gross revenues derived from digital advertising services in Michigan, effective January 1, 2026. The tax rates are tiered based on global annual gross revenues, with rates 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 procedures for tax collection, administration, and enforcement by the Department of Treasury.

Additionally, the bill mandates that individuals or entities with annual gross revenues from digital advertising services in Michigan of at least $1 million must file an annual return and make estimated quarterly payments. The revenue generated from this tax will be allocated to the State School Aid Fund and the Michigan Transportation Fund. The bill also includes provisions for maintaining records and filing requirements to ensure compliance with the new tax regulations.