The bill amends the 1933 PA 167 by introducing a new section, 4gg, which exempts the sale of eligible fuel from taxation starting January 1, 2026. Eligible fuel includes motor fuel, alternative fuel, and leaded racing fuel, while specifically excluding motor fuel sold for aircraft use (if the privilege tax has been paid), aviation fuel subject to the privilege tax, and certain fuels used for heating. The bill also clarifies definitions related to fuel types and establishes conditions for these exemptions. Additionally, it modifies existing provisions regarding the prepayment of taxes on fuel purchases and the distribution of collected tax revenues, detailing the responsibilities of refiners and terminal operators in the prepayment process and ensuring that a portion of the revenue supports transportation and aeronautics-related initiatives.

Furthermore, the bill stipulates that 65% of the tax collected at a rate of 2% on aviation fuel sales must be deposited into the qualified airport fund for authorized purposes under Michigan's aeronautics code. It mandates annual reconciliation of tax distributions and requires reporting on revenue losses to the state school aid fund due to various exemptions. The bill also establishes that collections from a 4% tax on computer software sales will be deposited into the Michigan health initiative fund, ensuring a minimum annual deposit of $9 million and a maximum of $12 million. Importantly, the enactment of this bill is contingent upon the passage of several other specified bills from the 103rd Legislature and is designed to take immediate effect upon enactment.

Statutes affected:
Substitute (H-1): 205.56
Substitute (S-3): 205.56, 205.75
House Introduced Bill: 205.56
As Passed by the House: 205.56
As Passed by the Senate: 205.56, 205.75
House Concurred Bill: 205.56, 205.75
House Enrolled Bill: 205.56, 205.75
Public Act: 205.56, 205.75