HB 4260 Michigan House · 2025-2026 Regular Session

Sales tax: distribution; distribution of certain sales tax revenue into the public safety and violence prevention fund; provide for. Amends sec. 25 of 1933 PA 167 (MCL 205.75). TIE BAR WITH: HB 4261'25

HB 4260 redirects $115 million annually from Michigan's 4% general sales tax revenue into the Public Safety and Violence Prevention Fund starting with the 2025-2026 fiscal year. This change affects state budget allocations, shifting funds previously going to the general fund toward public safety and violence prevention programs. The bill amends Michigan's General Sales Tax Act (MCL 205.75) to establish this specific annual transfer, with the amount adjusted based on actual tax collections. It does not create new taxes but reallocates existing revenue streams.

Bill status passed both 4 of 5 stages cleared

Introduction

Mar 2025

Committee Review

Apr 2025

House Passage

Apr 2025

Senate Passage

Apr 2025

Governor

Introduced Mar 18, 2025 Last action Apr 29, 2025

Maddy AI version diff · 2 comparisons

What changed between versions

As Passed by the House → Substitute (H-1) · 2 edits

MINOR

This bill primarily involves formatting and layout adjustments to the legislative text rather than substantive policy changes. The modifications include repositioning the bill title, adjusting spacing, and updating internal tracking identifiers (KAS numbers) from 'gi3jha' to '7abjfs'. No changes were made to tax rates, distribution percentages, or legal requirements.

TECHNICAL

Formatting adjustments to the bill header and title section, including spacing and indentation changes.

Updated internal document tracking identifiers from 'gi3jha' to '7abjfs' in the KAS header sections.

House Introduced Bill → As Passed by the House · 13 edits · Apr 22, 2025

MAJOR

This bill amends Michigan's General Sales Tax Act to update how tax revenues are distributed among various state funds, including new provisions for aviation fuel taxes, data center equipment exemptions, and public safety funding. The changes reflect updated revenue allocation priorities and clarify reporting requirements for specific tax exemptions.

Scope change

The bill modifies the distribution percentages and sources of sales tax revenue, particularly adding aviation fuel tax provisions and updating public safety funding amounts.

FISCAL

Added new subsection (2) requiring 15% of 4% sales tax collections to be distributed to cities, villages, and townships under the Glenn Steil state revenue sharing act.

Added new subsection (3) specifying that 60% of 4% sales tax collections must go to the state school aid fund, plus all collections from the 2% additional rate approved in 1994.

Modified subsection (4) to clarify that not less than 27.9% of 25% of certain fuel and vehicle sales tax collections must go to the comprehensive transportation fund, with a $18 million reduction for fiscal year 2021.

Added new subsection (5) requiring $115 million annually from 4% sales tax collections to be deposited in the public safety and violence prevention fund starting fiscal year 2025-2026.

Added new subsection (6) establishing quarterly distribution of aviation fuel tax (2% rate) between the state aeronautics fund (35%) and qualified airport fund (65%).

Added new subsection (8) requiring computer software sales tax collections to be deposited in the Michigan health initiative fund, with minimum $9 million and maximum $12 million annually.

Added new subsection (9) requiring additional deposits to the state school aid fund for revenue lost due to exemptions under sections 4a(1)(u), 4ee, and 1(1)(d)(xv).

REQUIREMENT

Added new subsection (7) requiring annual reconciliation of public safety fund distributions with actual collections, with reports provided to airport operators.

Added reporting requirement for persons claiming section 4ee exemptions to report sales price of data center equipment annually on a department-prescribed form.

DEFINITION

Added new definitions for aviation fuel, comprehensive transportation fund, qualified airport, qualified airport fund, state aeronautics fund, state school aid fund, and transportation administration collection fund.

TIMELINE

Modified subsection (5) timing from 'each fiscal year' to 'each calendar quarter thereafter' for aviation fuel tax distributions starting October 1, 2016.

ENFORCEMENT

Modified subsection (7) to clarify that reconciliation reports are subject to confidentiality restrictions under section 28(1)(f) of 1941 PA 122.

Added condition that this amendatory act does not take effect unless House Bill No. 4261 of the 103rd Legislature is enacted into law.

Floor votes · House Apr 22, 2025

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Apr 29, 2025

Committee

REFERRED TO COMMITTEE ON APPROPRIATIONS

upper

Apr 29, 2025

Upper · Passed

PASSED BY HOUSE WITH IMMEDIATE EFFECT

upper

Apr 22, 2025

Lower · Passed

passed; given immediate effect Roll Call #59 Yeas 104 Nays 4 Excused 0 Not Voting 2

lower

Apr 22, 2025

Lower · Passed

substitute (H-1) adopted

lower

Apr 17, 2025

Committee

referred to second reading

lower

Apr 17, 2025

Lower · Passed

reported with recommendation with substitute (H-1)

lower

Mar 18, 2025

Committee

referred to Committee on Government Operations

lower

Mar 18, 2025

Introduced

introduced by Representative Rep. Mike Harris

lower

1 primary · 37 co-sponsors