Bill Summary – FastDemocracy

Legislative Analysis
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TAXATION OF PEER-TO-PEER CAR SHARING
                                                                               http://www.house.mi.gov/hfa
House Bill 6375 as introduced                                                  Analysis available at
Sponsor: Rep. Ranjeev Puri                                                     http://www.legislature.mi.gov
House Bill 6376 as introduced
Sponsor: Rep. Pat Outman
Committee: Regulatory Reform
Complete to 9-20-22
SUMMARY:
        House Bill 6375 would amend 1991 PA 180, which allows certain counties and cities (“eligible
        municipalities”) to levy, with voter approval, an excise tax on restaurants, bars, hotel rooms,
        and rental cars, with the revenue to fund convention facilities or sports or entertainment
        facilities.
        The bill would provide that an eligible municipality may levy the tax on a person engaged in
        the business of peer-to-peer car sharing if delivery is made in the eligible municipality. (More
        specifically, the bill would specify that peer-to-peer car sharing is a form of the business of
        leasing or renting motor vehicles, which is already subject to the tax under the act.)
        House Bill 6375 is tie-barred to House Bill 4917 (see below), which means it cannot take effect
        unless HB 4917 is also enacted into law.
        MCL 207.752
        House Bill 6376 would amend the Use Tax Act to provide that peer-to-peer car sharing
        receipts under a car sharing program agreement are exempt from the tax under the act if the
        vehicle being shared was previously subject to the sales or use tax in Michigan or a comparable
        tax of another state.
        In addition, the bill would provide that a marketplace facilitator that has nexus in the state must
        collect and remit any tax due on all taxable peer-to-peer car sharing transactions under a car
        sharing program agreement facilitated by a marketplace facilitator as part of a peer-to-peer car
        sharing program.
        Finally, the bill would amend the act’s definition of the term lease or rental to provide that it
        includes peer-to-peer car sharing pursuant to a car sharing program agreement.
        MCL 205.92b et seq.
        Peer-to-Peer Car Sharing Program Act
        Under both bills, the terms car sharing program agreement and peer-to-peer car sharing
        would have the same definitions as in section 3 of the Peer-to-Peer Car Sharing Program Act
        (proposed by House Bill 4917).
House Fiscal Agency                                                                             Page 1 of 2
                   Peer-to-peer car sharing would mean the authorized use of a vehicle by an individual
                   other than the vehicle's owner through a peer-to-peer car sharing program. Peer-to-
                   peer car sharing would not include either of the following:
                       • Car rental or rental activity by a car rental company as defined in the Michigan
                           Consumer Protection Act.
                       • A transportation network company prearranged ride as that term is defined in
                           the Limousine, Taxicab, and Transportation Network Company Act.
                   Peer-to-peer car sharing program would mean a business platform that connects
                   vehicle owners with drivers to enable the sharing of vehicles for financial
                   consideration. Peer-to-peer car sharing program would not include any of the
                   following:
                       • A car rental company.
                       • A transportation network company.
                       • A service provider that is solely providing hardware or software as a service to
                          a person that is not effectuating payment of financial consideration for the use
                          of a shared vehicle.
                   Car sharing program agreement would mean the terms and conditions applicable to a
                   shared vehicle owner and a shared vehicle driver that govern the use of a shared vehicle
                   through a peer-to-peer car sharing program. Car sharing program agreement would not
                   include either of the following:
                       • A car rental agreement by a car rental company or a similar agreement.
                       • An agreement for a transportation network company prearranged ride.
FISCAL IMPACT:
           House Bill 6375 could potentially generate revenue for local units of government, although
           since levying the excise tax is up to the discretion of the local government, it is not possible to
           determine in advance how broadly it would be implemented.
           As written, House Bill 6376 would not be expected to have any impact on use tax collections
           assuming the use tax would have already been paid when the vehicle was purchased and
           registered. According to the Department of Treasury, the bill codifies the treatment already
           outlined in Revenue Administrative Bulletin 2021-22.1
                                                                  Legislative Analyst: Josh Roesner
                                                                       Fiscal Analyst: Jim Stansell
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations and does not constitute an official statement of legislative intent.
1
    https://www.michigan.gov/taxes/rep-legal/rab/rabhtml/2021/revenue-administrative-bulletin-2021-22
House Fiscal Agency                                                 HBs 6375 and 6376 as introduced     Page 2 of 2
Statutes affected: 
House Introduced Bill: 207.752