Use tax: exemptions; motor fuel sales; exempt. Amends sec. 21 of 1937 PA 94 (MCL 205.111) & adds sec. 4gg. TIE BAR WITH: HB 4180'25, HB 4181'25, HB 4183'25, SB 0578'25

The use tax exemption in section 4gg was expanded from covering only aviation fuel to covering all eligible fuel, defined as motor fuel, alternative fuel, and leaded racing fuel, with specific exclusions for aviation-related fuels subject to the aeronautics code privilege tax, heating/cooling fuel, and non-vehicle-use LPG.

Section 4hh was removed. The House version had created this as a separate exemption for eligible fuel effective October 1, 2025; the Senate consolidated it into the revised section 4gg.

The effective date of the use tax exemption was changed from October 1, 2025 to January 1, 2026.

Section 6c was entirely removed. This section had required quarterly informational reports to the department detailing aviation fuel sales, purchases, taxable gallons by airport, and gross proceeds, with a penalty of $10 per day (up to $500) for failure to file.

The quarterly distribution of aviation fuel use tax collections to airports under section 21(5) was made permanent by removing the 'through September 30, 2025' end date. Previously this distribution was set to expire after 2025.

Section 21(6) reconciliation provisions were simplified: the time limit of 'fiscal years ending before October 1, 2025' was removed, making annual reconciliation a permanent requirement. The department's authority to transfer money between funds or delay distributions for final adjustments was also removed.

The list of companion bills required for the act to take effect was reduced from eight bills (HB 4180, 4181, 4183, 4184, 4185, 4186, 4187, 4230) to four bills (SB 578, HB 4180, 4181, 4183).

Corrected formatting inconsistencies and removed extraneous text from the bill header and introductory sections.

Fixed a grammatical error in Section 6c(3) where the word 'is' was duplicated in the penalty clause.

Added new subsections to Section 21 detailing the distribution of aviation fuel tax collections to the state aeronautics fund and qualified airport fund.

Added provisions requiring $75,000,000 annually to be deposited into the local government reimbursement fund starting with the fiscal year ending September 30, 2024.

Added definitions for 'qualified airport', 'qualified airport fund', 'state aeronautics fund', and 'state school aid fund' to Section 21(8).

Fixed capitalization and formatting inconsistencies in the title and enacting clause (e.g., 'SENATE SUBSTITUTE' to 'Senate substitute', 'THE PEOPLE' to 'the peoplE', and corrected line breaks throughout the document).

Reorganized the layout of Section 4gg and Section 21 to remove duplicate text and streamline the presentation of subsections, particularly in the definitions and revenue allocation sections.

Corrected minor spacing and punctuation issues in the text, such as removing extra line breaks and ensuring consistent formatting of legal citations and fund names.

The exemption effective date was changed from October 1, 2025 to January 1, 2026.

The exemption was expanded from only aviation fuel to include alternative fuel and leaded racing fuel, but excludes motor fuel used for residential, commercial, or industrial heating purposes.

New definitions were added for 'alternative fuel', 'eligible fuel', 'leaded racing fuel', 'liquified petroleum gas', and 'motor fuel' to clarify what fuels qualify for the exemption.

The school aid fund revenue provisions were updated to include new categories for revenue lost from exemptions under section 4(1)(gg) and section 4cc, plus a new subsection for revenue lost from section 2(1)(f)(xv) exclusion.

The quarterly informational reporting requirements for aviation fuel sales were removed from the bill.