The bill amends the General Sales Tax Act of 1933, specifically section 25, to update the distribution of sales tax revenues. It mandates that all money collected under the act be deposited into the state treasury, with specific allocations outlined for various funds. Notably, 15% of the collections from the 4% sales tax will be distributed to local municipalities under the Glenn Steil state revenue sharing act. Additionally, starting October 1, 2025, 8.62% of the collections will be directed to the revenue sharing trust fund for distribution to local governments. The bill also specifies that 27.9% of 25% of the sales tax on motor vehicle fuels must be deposited into the comprehensive transportation fund, with a temporary reduction for the fiscal year ending September 30, 2021.

Further changes include the establishment of a minimum annual deposit of $9 million and a maximum of $12 million into the Michigan health initiative fund from sales tax on computer software. The bill also clarifies the reconciliation process for tax collections and distributions, ensuring that adjustments are made based on actual collections. The balance in the state general fund must now be disbursed only through legislative appropriations. Overall, the bill aims to enhance the distribution framework of sales tax revenues to better support local governments and specific state funds.

Statutes affected:
House Introduced Bill: 205.75