The bill amends the General Sales Tax Act of 1933, specifically section 25, to update the distribution of sales tax revenues collected under the act. Key changes include the specification that 15% of the 4% sales tax collections will be distributed to local municipalities according to the Glenn Steil state revenue sharing act, with the relevant legal reference updated. Additionally, the bill introduces a new provision that mandates $755 million of the 4% sales tax collections to be deposited into the state school aid fund for the fiscal year ending September 30, 2026, and each fiscal year thereafter. Furthermore, it establishes that $95 million of the same tax collections will be distributed to cities, villages, and townships on a per capita basis starting in the same fiscal year.

The bill also includes provisions for the distribution of tax revenues from aviation fuel sales, with specific percentages allocated to the state aeronautics fund and the qualified airport fund. It outlines the reconciliation process for tax collections and distributions, particularly for fiscal years ending before October 1, 2025, and emphasizes the importance of reporting lost revenue due to exemptions affecting the state school aid fund. Overall, the amendments aim to enhance funding for local governments and education while ensuring proper management of tax revenues.

Statutes affected:
Substitute (H-2): 205.75
House Introduced Bill: 205.75
As Passed by the House: 205.75