The proposed bill amends the Income Tax Act of 1967 by adding a new section, 678, which introduces a tax credit for qualified taxpayers involved in the production or blending of sustainable aviation fuel in Michigan. Starting from tax years beginning on January 1, 2026, these taxpayers can claim a credit of $1.50 per gallon of sustainable aviation fuel that they produce or blend in the state and sell to purchasers for use in aircraft departing from Michigan airports. The credit amount can increase by $0.02 for each additional 1% reduction in life-cycle greenhouse gas emissions above 50%, with a maximum credit limit of $2.00 per gallon.

To qualify for this credit, taxpayers must obtain a tax credit certificate from the Department of Environment, Great Lakes, and Energy, which must be attached to their annual tax return. If the credit exceeds the taxpayer's tax liability, the excess amount will be refunded. The bill also defines key terms such as "sustainable aviation fuel," "qualified taxpayer," and "tax credit certificate" in accordance with the existing sustainable aviation fuel incentive program act. The enactment of this bill is contingent upon the passage of Senate Bill No. 236.

Statutes affected:
Substitute (S-1): 206.1, 206.847
Substitute (S-2): 206.1, 206.847
Senate Introduced Bill: 206.1, 206.847
As Passed by the Senate: 206.1, 206.847