The bill amends the Motor Fuel Tax Act by updating the tax rates imposed on motor fuel and introducing new provisions regarding the calculation and application of these rates. Specifically, it establishes a tax rate of 26.3 cents per gallon for both gasoline and diesel fuel starting January 1, 2017, and outlines a mechanism for adjusting this rate annually based on inflation or a fixed increase. Notably, a new provision allows for a zero tax rate on motor fuel until either November 1, 2026, or until the nationwide average gas price falls below $3.50, effectively providing temporary relief to consumers.

Additionally, the bill modifies the tax structure for alternative fuels, aligning their tax rates with those of motor fuels. It specifies that if the motor fuel tax is set to zero, the tax on alternative fuels will also be zero. The bill emphasizes the importance of ensuring that any tax reductions are passed on to end users and mandates that alternative fuel dealers collect and remit taxes in a specified manner. Overall, the amendments aim to create a more responsive and equitable tax system for motor and alternative fuels in Michigan.

Statutes affected:
House Introduced Bill: 207.1008, 207.1152