This bill amends the Motor Fuel Tax Act by updating the tax rates imposed on motor fuel and alternative fuels in Michigan. It specifies that the tax on gasoline and diesel fuel will be 26.3 cents per gallon starting January 1, 2017, and outlines a mechanism for adjusting these rates annually based on inflation or a fixed increase. Notably, if the statewide average price of gasoline reaches $5.00 per gallon before December 31, 2026, the tax rate will temporarily drop to zero for a specified period. The bill also includes provisions for the collection of taxes on motor fuel lost or unaccounted for at terminals and mandates that end users benefit from any tax reductions.

Additionally, the bill establishes that the tax on alternative fuels will be equal to the motor fuel tax rate, with specific exemptions for certain commercial users until 2017 and 2018. It also states that if the motor fuel tax is zero due to the price cap, the tax on alternative fuels will also be zero. The bill emphasizes the importance of passing tax reductions on to end users and requires detailed reporting and compliance from fuel suppliers and dealers. The enactment of this bill is contingent upon the passage of another related bill.

Statutes affected:
House Introduced Bill: 207.1008, 207.1152