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 procedures for tax collection, administration, and enforcement by the Department of Treasury.

Additionally, the bill mandates that entities with annual gross revenues from digital advertising services in Michigan of at least $1 million must file an annual return and estimated quarterly returns. It also requires the maintenance of records related to the digital advertising services provided in the state. The revenue generated from this tax will be allocated to the State School Aid Fund and the Michigan Transportation Fund. The bill includes provisions for penalties and the powers and duties of state and local governmental officers in relation to the tax.